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New Governor stresses need for CBSL independence
The Central Bank of Sri Lanka (CBSL) had to operate independently, newly appointed Governor of the Central Bank, Dr. Nandalal Weerasinghe said yesterday, addressing the media.
Dr. Weerasinghe added that Sri Lanka’s inflation was expected to reach 25% by next month.
The Central Bank earlier increased the Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 700 basis points to 13.50 percent and 14.50 percent.
The new Governor added that due to increased interest rates the economic growth would be lower.
“Right now what’s important is stability. We need to apply brakes and that’s the objective. It will get worse before it gets better,” he said.
Dr. Weerasinghe added that there were many positives in increasing interest rates, including addressing balance of payment problems.
“Now, the government will be able to raise money from primary auctions,” he said.
Due to low interest rate maintained during the past few years, large companies benefited greatly, Dr. Weerasinghe said.
“Despite the pandemic issues, big corporates made historic gains. This was due to low taxes and low interest rates. People who were saving and paying taxes were funding corporates. Its time to repay.
Everything has trade-offs,” the new Governor said.
Dr. Weerasinghe said that people who were living on savings had been badly affected in the past two years. He added that he was not serving politicians.
Earlier in the day, the Central Bank of Sri Lanka increased the Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 700 basis points to 13.50 per cent and 14.50 per cent.
Issuing a press release the Central Bank said that the rate increase comes into effect from the close of business on 08 April 2022.
The Central Bank said that they noted that inflationary pressures that could further intensify in the period ahead.
These pressures would be driven by the build-up of aggregate demand, domestic supply disruptions, exchange rate depreciation and the elevated prices of commodities globally.
Therefore the bank was of the “view that a substantial policy response is imperative to arrest the buildup of added demand driven inflationary pressures in the economy and preempt the escalation of adverse inflationary expectations, to provide the required impetus to stabilize the exchange rate and also to correct anomalies observed in the market interest rate structure.”
News
All set for Colombo rally against govt.’s tax policies
The Frontline Socialist Party-backed People’s Struggle Movement is set to stage a protest march in Colombo today (03) against what it describes as the growing tax burden on the public and the rising cost of living.
The organisers are due to commence the “Colombo March Against Unjust Taxes” at noon from Campbell Park, Borella. The FSP has also been mobilising support for the protest in Colombo and its suburbs in the run-up to the event.
People’s Struggle Movement National Executive Council member Wasantha Mudalige, speaking at a media briefing in Nugegoda yesterday (02), called on the public to join the protest, saying the movement intended to bring the tax burden faced by ordinary people to the forefront.
Mudalige alleged that successive tax measures had placed an excessive burden on households, particularly through taxes on food and educational items. He also criticised the Government over what he described as the high cost of basic food items and the difficulties faced by parents in meeting their children’s educational expenses.
He accused the Opposition of failing to adequately address the issue, claiming that opposition parties raised such concerns, mainly during election periods.
Mudalige also criticised the Government for what he described as a departure from promises made before the 2024 presidential election regarding taxes on educational equipment.
He questioned the tax burden on food items, citing figures of Rs. 100 per kilogramme on dried sprats, Rs. 310 per kilogramme on chicken and Rs. 11 per egg.
He further alleged that while ordinary people were bearing a heavy tax burden, wealthy groups were receiving tax concessions. He also criticised the Government’s economic programme and its implementation of measures associated with the International Monetary Fund (IMF).
The movement has framed today’s protest as part of a broader campaign over the cost of living and taxation. The People’s Struggle Alliance has separately announced that the Campbell Park demonstration will be the first in a series of public actions, with further protests planned in November.
Mudalige said the movement would continue to take the issue to the streets and urged the public to participate in today’s demonstration.
People’s Struggle Movement National Executive Council member Jayantha Amarasinghe also addressed the press.
News
Yoshitha R money laundering trial postponed
The Colombo High Court yesterday postponed the trial in the case filed under the Prevention of Money Laundering Act against Yoshitha Rajapaksa, son of former President Mahinda Rajapaksa.
The case was taken up before Colombo High Court Judge Udesh Ranatunga, with Yoshitha Rajapaksa, who is currently out on bail, appearing in court.
The trial was postponed as the President’s Counsel appearing for the defence was indisposed.
The Attorney General has filed the case against Rajapaksa, alleging that he committed an offence under the Prevention of Money Laundering Act by purchasing five plots of land in Dehiwala and Ratmalana, worth more than Rs. 73 million.
News
Lankan troops test mettle in Russian war games
A contingent of the Sri Lanka Army, comprising 20 officers and 55 other ranks, participated in the combined military exercise ‘Wolverine Path II–2026’, conducted with the Armed Forces of the Russian Federation in Vladivostok, Russia, from September 18 to 25.
According to the Ministry of Defence, the exercise primarily focused on counter-terrorism operations and provided participating troops with training in a challenging combined operational environment.
The exercise included a range of tactical activities, including heli-rappelling, close-quarters battle (CQB), ambush operations, sniper firing, drone operations, buggy training and combat medical support.
The Ministry said the training enabled Sri Lankan troops to further develop their combat skills, tactical coordination and operational readiness.
It also provided an opportunity for the two militaries to exchange professional knowledge, operational experience and tactical expertise. Sri Lankan personnel gained exposure to training methodologies, tactical approaches and operational practices adopted by the Russian Armed Forces, the Ministry said.
The participation also enabled the Sri Lankan contingent to identify lessons from the joint training and share its own experiences with the Russian military.
The Sri Lankan contingent returned to the country following the exercise and arrived at Mattala Rajapaksa International Airport on September 28.
The Ministry said participation in the exercise contributed to enhancing the professional knowledge, tactical awareness and operational preparedness of Army personnel while promoting military-to-military cooperation, mutual understanding and professional relations between Sri Lanka and Russia.
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