Connect with us

News

Sri Lanka exporters should convert, rupee worth 185 to dollar: Minister Cabraal

Published

on

by Imesh Ranasinghe

Sri Lanka’s rupee should be around 185 to the US dollar, State Minister for Money and Capital Markets Nivard Cabraal has said urging exporters to convert dollar inflows without holding them back.

“I think the rupee should be around 185 to the US dollar depending on the macroeconomic factors,” Minister Cabraal said at a conference last week.

Cabraal a former central bank Governor kept the rupee stable for several years, though after a fall in 2012, it was not allowed to appreciate when credit fell in 2013 and the central bank bought billions of dollars for its reserves, for reasons that are not clear.

Sri Lanka’s rupee fell sharply in over January 2021 after the central bank printed money and brought rupee interest rates below local dollar yields over the past year amid a credit downgrade which drove up dollar bond yields, making forward premiums negative and incentivizing importers to cover forward.

As exporters also unwilling to sell forward at a discount, banks bought dollars in the spot and near term market, using the printed money from the central which are sloshing around as excess liquidity to provide forward cover to importers, putting pressure on exchange rate.

Some exporters loaned dollars and were borrowing rupees due to the inverted interest rates.

Due to unprecedented levels of excess liquidity in the overnight market interest rates did not move up in a correction – which would have raised the forward premium – despite interventions by the central bank which reduced some excess liquidity.

Excess liquidity fell from 266 billion rupees at the beginning of the year to around 120 billion rupees amid dollar losses to interventions and debt repayments.

The central bank then closed the forward market, preventing banks from giving forward cover.

“So the central bank took necessary actions about that,” Cabraal said. “And because of those actions taken by the central bank in the past few days, we once again saw the rupee being appreciated.”

Minister Cabraal asked exporters to convert their dollars as soon they receive them, as they may face losses by listening to fear mongers.

“We should keep in mind that it is a tough period for the world, so in such a tough period when we are going forward we all should go forward together,” he said.

“It’s like going in a boat, when that boat is going in a rough sea we should not shake the boat, If one or two tries to shake the boat everyone in the boat will have to face the consequences.”

Cabraal said if some are shaking the boat in that manner will, they will have to take necessary steps in order to stop them from shaking and making the boat unstable,

“It is what the central bank has done now,” he said. “There are other things the central bank can do but our opinion is that it is not necessary to do them now.”

Analysts have blamed a so-called ‘flexible exchange rate’ where a pegged exchange rate is suddenly turned into a floating exchange rate as money printing puts pressure triggering panic and uncertainty forcing importers settle bills immediately taking more credit and exporters to watch and wait.

There have been calls for central bank reform to stop the instability.

The rupee has appreciated in recent days from around 196 to 191 to the US dollar.

Meanwhile Cabraal said in 2014, when Mahinda Rajapaksa administration had left office, the US dollar was 131.5 rupees to the dollar.

At the time the only accusations from the economic experts in the opposition at that time were that the Central Bank is controlling the rupee as it was stable for years and the rupee should be allowed to float.

“But after they came into power the rupee depreciated for 5 years like never before with an annual average depreciation of 6.7 percent,” he said.

There were no global crisis or any other problem during those five years but the rupee depreciated to 181.63 against the US dollar.

“The rupee only depreciated by 2.6 percent in 2020, it is a big achievement when considering the tough period we are going through, meanwhile, the central bank was able to collect 282 million dollar to buttress its reserves,” Cabraal.

Other analysts had also blamed the last administration for giving the central bank independence to target a real effective exchange rate on contested claims that the rupee was more ‘overvalued’ than East Asia while printing money.

The resulting currency crisis then created consumption shocks that lowered growth.

More money was then printed on the basis that there was an output gap, triggering another currency crisis and destroying the economic credential of the United National Party, which was the largest partner of the then ruling coalition.

Analysts had warned of the outcome earlier.

Analysts and economists are now warning that the current monetary framework involving so-called modern monetary theory, with high levels of excess liquidity would also have dangerous consequences as soon as economic activity picks up.

While tourism receipts fell, with no dollar income for tourist sector workers and hotel owners to spend, imports will fall by the same amount, unless money was printed, and credit picked up.

There have been steady losses in foreign reserves, mostly from the financial account despite weak credit lowering imports. (ECONOMYNEXT)



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Sri Lanka Customs exceeds revenue targets to enters 2026 with a surplus of Rs. 300 billion – Director General

Published

on

By

The year 2025 has been recorded as the highest revenue-earning year in the history of Sri Lanka Customs, stated Director General of Sri Lanka Customs, Mr. S.P. Arukgoda, noting that the Department had surpassed its expected revenue target of Rs. 2,115 billion, enabling it to enter 2026 with an additional surplus of approximately Rs. 300 billion.

The Director General made these remarks at a discussion held on Tuesday  (30)  morning at the Sri Lanka Customs Auditorium, chaired by President Anura Kumara Dissanayake.

The President visited the Sri Lanka Customs Department this to review the performance achieved in 2025 and to scrutinize the new plans proposed for 2026. During the visit, the President engaged in extensive discussions with the Director General, Directors and senior officials of the Department.

Commending the vital role played by Sri Lanka Customs in generating much-needed state revenue and contributing to economic and social stability, the President expressed his appreciation to the entire Customs employees for their commitment and service.

Emphasizing that Sri Lanka Customs is one of the country’s key revenue-generating institutions, the President highlighted the importance of maintaining operations in an efficient, transparent and accountable manner. The President also called upon all officers to work collectively, with renewed plans and strategies, to lead the country towards economic success in 2026.

The President further stressed that the economic collapse in 2022 was largely due to the government’s inability at the time to generate sufficient rupee revenue and secure adequate foreign exchange. He pointed out that the government has successfully restored economic stability by achieving revenue targets, a capability that has also been vital in addressing recent disaster situations.

A comprehensive discussion was also held on the overall performance and progress of Sri Lanka Customs in 2025, as well as the new strategic plans for 2026, with several new ideas and proposals being presented.

Sri Lanka Customs currently operates under four main pillars, revenue collection, trade facilitation, social protection and institutional development. The President inquired into the progress achieved under each of these areas.

It was revealed that the Internal Affairs Unit, established to prevent corruption and promote an ethical institutional culture, is functioning effectively.

The President also sought updates on measures taken to address long-standing allegations related to congestion, delays and corruption in Customs operations, as well as on plans to modernize cargo inspection systems.

The discussion further covered Sri Lanka Customs’ digitalization programme planned for 2026, along with issues related to recruitment, promotions, training and salaries and allowances of the staff.

Highlighting the strategic importance of airports in preventing attempts to create instability within the country, the President underscored the necessity for Sri Lanka Customs to operate with a comprehensive awareness of its duty to uphold the stability of the State, while also being ready to face upcoming challenges.

The discussion was attended by Minister of Labour and Deputy Minister of Finance and Planning, Dr. Anil Jayanta Fernando, Deputy Minister of Economic Development, Nishantha Jayaweera, Secretary to the President, Dr. Nandika Sanath Kumanayake, Deputy Secretary to the Treasury, A.N.Hapugala, Director General of Sri Lanka Customs,  S.P.Arukgoda, members of the Board of Directors and senior officials of the Department.

Continue Reading

News

Educators slam govt. for ‘unprepared’ education reforms

Published

on

Teachers, principals and education professionals have said the government is unprepared to roll out proposed education reforms scheduled to take effect from next week, and warned of nationwide trade union action if the plans are implemented without adequate consultation and preparation.

Addressing a press conference in Colombo, President of the Association of Education Professionals, Ven. Ulapane Sumangala Thera, said Ministry officials had indicated that the reforms would be implemented from Monday, 05 January, but claimed that the vast majority of educators were opposed to the move.

“More than 90 percent of teachers say they have not received proper training on the new syllabus or the proposed reforms,” Ven. Sumangala Thera said. He alleged that the government was attempting to suppress opposition from teachers and principals by declaring school holidays, instead of addressing their concerns.

“If the government continues with these tactics, we will have no option but to resort to trade union action at a national level,” he warned.

Meanwhile, representatives of 16 teachers’ and principals’ unions who visited the Ministry of Education at Isurupaya on Monday to seek clarification on the reforms were turned away by security officials, reportedly on the grounds that prior appointments were required.

Speaking to the media outside the Ministry, Amila Sandaruwan of the Teacher Principals’ Collective said the delegation had attempted to raise their concerns during the Public Day allocated for visitors. “We wanted to know how these reforms are to be implemented and sought to meet the Secretary to the Ministry of Education, but we were barred,” he said.

Sandaruwan accused the Government of proceeding in an “adamant” manner and claimed the reforms were being driven by a handful of non-governmental organisations closely associated with senior ministry officials. “We will not allow this to happen,” he said.

Graded Principals’ Association representative Nimal Mudunkotuwa said widespread confusion prevailed among teachers and school administrators regarding the practical aspects of implementing the reforms. “There is no clarity on school hours—whether schools are to close at 1.30 p.m. as before, or continue until 2.00 p.m. as proposed,” he said.

He added that uncertainty also remained over the number of daily teaching periods, with conflicting statements suggesting either seven or eight periods. “Schools have yet to receive syllabus modules from the Ministry, and many schools lack smart boards and internet connectivity required to implement these reforms,” Mudunkotuwa said.

Ven. Ulapane Sumangala Thera strongly criticised the proposed reforms, describing them as “bastard reforms,” and accused the NPP Government of undermining the education system. He also raised objections to a unit in the proposed Grade Six English syllabus dealing with gay and lesbian relationships, claiming that senior Buddhist prelates, the Catholic Cardinal and other religious leaders had opposed its inclusion.

“The Government refuses to listen even to religious leaders,” he said.

Concerns were also raised at a National Sangha Council meeting held in Colombo on Monday evening at the Colombo Foundation Institute, organised to discuss the objectives of the proposed reforms. Addressing the gathering, Professor Venerable Induragare Dhammaratana Thera said the reforms required extensive discussion, consultation with subject experts and consideration of the experience of senior administrators.

He warned that the proposed changes could trigger the biggest crisis currently facing the country. “Implementing these reforms in this manner will harm future generations and could even destroy the present Government,” he said, likening the process to “forcing a round peg into a square hole.”

Continue Reading

News

Leading the Nation’s Connectivity Recovery Amid Unprecedented Challenges

Published

on

SLT Mobitel teams at work after Cyclone Ditwah

SLT-MOBITEL’s post-Cyclone Ditwah response reinforces its role as the National ICT Solutions Provider

In the aftermath of Cyclone Ditwah, SLT-MOBITEL led one of the most extraordinary national connectivity restoration efforts in recent years, mobilising the full breadth of its operational network, technical expertise, and emergency response systems to safeguard Sri Lanka’s digital lifeline.

The cyclone caused extensive flooding, landslides, and infrastructure damage throughout several districts, disrupting multiple layers of the national network. Yet within days, SLT-MOBITEL mounted one of the fastest and most comprehensive recovery operations in the company’s history, reaffirming the organisation’s role as the country’s telecommunications backbone.

From the earliest hours of the disaster, SLT-MOBITEL activated a coordinated national response, drawing on its regional operational structure, specialised engineering teams, and emergency governance mechanisms. The Sri Lanka Backbone Network (SLBN), the country’s most critical digital artery, signalled excellent resilience, with only a handful of nodes affected and restored within 24 hours. As the National ICT Solutions Provider, SLT-MOBITEL prioritised restoring connectivity for other network operators and users, while simultaneously extending comprehensive support to its own customers, ensuring that mobile services were swiftly re-established across the country.

The rapid restoration of SLT-MOBITEL’s islandwide core network served as a critical catalyst in accelerating the recovery of both fixed and mobile services across nearly all disaster-affected areas. This swift action also enabled other operators affiliated with SLT-MOBITEL to speedily restore their services, reinforcing the continuity of nationwide connectivity. To drive this effort, SLT-MOBITEL established a centralised ‘War Room’, operating under close management oversight, to coordinate telecommunication network restoration and rehabilitation across the country. Initial assessments indicate recovery and network upgrade costs of approximately LKR 5 to 6 billion.

SLT-MOBITEL teams worked around the clock to repair damaged fibre routes, recover flooded cabinets, and restore thousands of access nodes affected by the cyclone. In areas where fibre infrastructure was severely damaged, the company deployed temporary Fixed Wireless Access (FWA) facilities, helping communities, emergency responders, and essential services stay connected. Priority restoration was extended to hospitals, government agencies, and enterprise customers, helping with the continuity of critical national operations during the emergency.

SLT-MOBITEL also launched the 247 National Medical Helpline, a dedicated, round-the-clock support service introduced in collaboration with the University of Colombo. Within the first week of the launch, the medical helpline received a large volume of calls as the initiative provided immediate initial medical guidance to individuals facing injuries, infections, waterborne diseases, and other health complications. The service was powered by SLT-MOBITEL’s national connectivity backbone and a team of medical professionals arranged by the University of Colombo. The helpline became a vital public service, demonstrating the company’s commitment to supporting Sri Lankans in crisis and recovery through resilient infrastructure and accessible, people-centred communication. More importantly, the service was made available to all network providers, guaranteeing no one was excluded from receiving medical assistance islandwide.

SLT-MOBITEL worked closely with the Ministry of Defence, serving as the connectivity solutions provider for national disaster response efforts. With the support of the Sri Lanka Army, field teams were able to swiftly access affected sites, enabling faster repairs, safer operations, and the restoration of services in some of the most challenging terrains. The partnership highlighted the critical role of telecommunications in national security, emergency coordination, and public safety, with the Army’s contributions acknowledged with gratitude.

In addition to network restoration, SLT-MOBITEL extended critical national-level support to various government institutes, sustaining essential public services during the disaster period. As a result of the services provided, SLT-MOBITEL secured uninterrupted operations and dependable connectivity for these vital national institutes.

Within one week of the cyclone, SLT-MOBITEL had successfully restored over 98 percent of the sites impacted by the cyclone, with only a small number of locations in the most severely affected districts, pending access clearance. The company continues to address individual customer connections and any remaining access nodes, despite significant human resource and environmental challenges. Throughout the recovery period, customers demonstrated commendable patience and understanding, which greatly supported the restoration efforts.

The disaster has also highlighted the urgent need for long-term national network resilience. SLT-MOBITEL is advocating for the accelerated undergrounding of high-risk fibre routes, prioritised access to bridge ducts, and fast-tracked power restoration protocols during emergencies. The company is also advancing the migration of copper-based access networks to fibre.

As Sri Lanka’s National ICT Solutions Provider, SLT-MOBITEL is committed to keeping the nation connected in every crisis. The rapid restoration efforts, cross-government support, and dedication to public service reiterates the company’s mission to rise above commercial operations, upholding the role as the country’s trusted digital lifeline.

Continue Reading

Trending