Business
Value of the rupee against USD to remain stable in Q4 2021
By Sanath Nanayakkare
The Central Bank would make efforts to maintain the Rupee at the very competitive level of Rs. 199 to Rs. 203 against the USD over the next three months and would be reviewed thereafter, the Central Bank said unveiling its six-month Road Map on Friday.
The Central Bank is poised ensure forex inflows into formal channels with the use
of existing and restored licenses and will act to avoid informal, and/or illegal channels of forex inflows and outflows thus disallowing parallel market activity at diverse exchange rates
In managing foreign exchange reserves, due regard will be paid to the differential between building reserves through borrowing and investing in low-yielding global assets.
With regard to resolving debt and forex issues in the banking/ non-bank sector, plans are afoot to mobilise fresh forex funding on competitive terms based on the strength of the bank’s / financial institution’s own balance sheets. The target for this has been set at USD 1.5 bn.
Further, forex positions will be closely monitored while prudently screening the forex outflows with the implementation of the Tax Amnesty through the Finance Act.
At the same time, forex investments will be encouraged in government securities and Sri Lanka Development Bonds.
Essential imports will be facilitated wherever possible while engaging with counterparties to dampen undue speculation on the debt situation and enhance their knowledge on the Sri Lankan economy and the financial system.
Foreign investors will be supported to invest in non-bank sector institutions while also supporting the establishment of equity funds for SMEs.
The repatriation and conversion of proceeds of services exports and adherence to systems that monitor forex flows related to services will be ensured.
Support will be extended to prepare for the resumption of tourism, and ensure the repatriation and conversion of earnings
Moves will be taken to avoid speculative demand for imports and the build-up of large inventories thus ensuring the supply of goods to the domestic market with a reasonable profit, rather than generating super-normal profits through speculative price increases.
Utilising domestic inputs will be encouraged to diversify businesses with a greater focus.
New opportunities are being explored through investment in production for the domestic and export markets. Increased domestic investment and partnerships with foreign investors will be facilitated in dedicated industrial zones.
Campaigns will be expanded to attract foreign investors for Sri Lankan real estate, including condominiums.
Foreign investment in Sri Lankan real estate will be promoted based on the resident/long-term visa incentives, as well as investment in warehousing, plug & play services, and dedicated zones for IT.
With the return of stability in the forex markets and the interest rates opportunities will open up for investment and expansion With the passing of the new SEC Act investments into listed corporate debentures will be more attractive For resolving debt and forex issues of the government, the target is to increase to exports to above USD 1.0 bn per month, on average during the remainder of 2021.
High-level discussions with respective governments to secure short to medium term G2G financing to buttress inflows (short-term target: USD 1.0 bn; Next 3 months: USD 500 mn).
Monetising selected non-strategic and under-utilised assets to accrue USD 1.0 bn. Publishing Port City Commission by-laws to attract FDIs into the Colombo Port City Facilitating inflows from the implementation of the Tax Amnesty through the Finance Act (Target: USD 100 mn).
Rebasing GDP (which is overdue by 1 ½ years) without further delay, to reflect the true size of the economy.
Introducing appropriate tax adjustments to promote domestic value addition of exports and ensure conversion of export earnings; Discouraging forex leakages through online and informal channels Considering to introduce a mechanism to allow the import of motor vehicles to Sri Lanka using foreign earnings or FDI, with relevant taxes being paid to the Government in forex.
The contents of the Road Map of the Central Bank thus signals a business-friendly budget in November 2021 with detailed financing strategies.
Business
Needs of populace hit by Cyclone Ditwah seen as waiting to be addressed
By Hiran H. Senewiratne
The government is yet to address fully the needs of the Cyclone Ditwah affected populace though one year has elapsed. The devastation cost the country more than US $ 4.1 billion, an Australia-based Chartered Engineer of Sri Lankan origin said.
‘Cyclone Ditwah affected more than 2.2 million people in 25 districts, which is considered to be one tenth of the population. However, only 39 percent of the allocated funds have been spent to date, the speaker, a one-time General Secretary of the JVP, now living in Australia Lionel Bopage said.
He made these comments at a Rotary Club Colombo South monthly meeting held at the Kingsbury Hotel, Colombo recently.
Bopage quoted from a Loughborough University research report published in February to the effect that Sri Lanka has under invested in prevention but over invested in recovery.
Bopage added: ‘The largest single economic category affected were not buildings but the agriculture sector which provides livelihoods for the majority of affected persons. Therefore agricultural livelihoods have been hit most.
‘More than 58,000 hectares of paddy lands were flooded in the Eastern districts alone, while 46 reservoirs reached critical spill level or failed outright following the disaster.
‘A rapid education sector assessment found that 1,682 schools were affected and more than 555,000 children were unable to attend schools. Further, 622 water supply schemes had been left non-functional and apart from that 11300 homes were damaged or destroyed. But reconstruction is happening at a very slow pace.
‘Tens of thousands of households in the hill country and in the East are still living in damaged properties and on unstable slopes drawing water from schemes that have not been restored.
‘ A Post Disaster Needs Assessment put the cost of resilience at US$ 3.4 billion but restoration work is happening at a slow pace even with foreign donor assistance.’
Business
WB forecast buoys bourse but weak investor participation slows momentum
By Hiran H. Senewiratne
The CSE yesterday kicked off on a positive note due to a World Bank forecast that Sri Lanka could achieve 4.4 percent economic growth this year but later lost momentum due to weak investor participation.
Amid those developments both indices moved upwards. The All Share Price Index went up by 132 points while S and P SL20 rose by 21.02 points.
Turnover stood at Rs 1.97 billion with three crossings. Those crossings were; Lanka IOC 2.7 million shares crossed to the tune of Rs 470 million; its shares traded at Rs 127, CCS 2.7 million shares crossed to the tune of Rs 315 million; its shares sold at Rs 118 and JKH five million shares crossed for Rs 91.5 million; its shares traded at Rs 18.30.
In the retail market companies that mainly contributed to the turnover were; Commercial Credit and Finance Rs 126 million (1.3 million shares traded), Lanka IOC Rs 98 million (775,000 shares traded), Asiri Surgical Hospitals Rs 77 million (7.6 million shares traded), Commercial Bank Rs 51.3 million (307,000 shares traded), Sampath Bank Rs 46 million (325,000 shares traded), HNB Rs 37 million (98000 shares traded) and Tokyo Cement Rs 31 million (393,000 shares traded). During the day 50 million share volumes changed hands in 14547 transactions.
It is said that the petroleum sector performed well, especially Lanka IOC, while in the banking sector counters, especially Commercial Bank and Sampath Bank performed well. In the manufacturing sector, JKH impressed.
TAL Lanka Hotels announced that it has scheduled an Extraordinary General Meeting on October 29 to obtain shareholder approval for a proposed Rs 1.87 billion rights issue. The proceeds will be utilized for the repayment of bank borrowings, part refurbishment of the Taj Samudra Hotel in Colombo, settlement of vendor liabilities, and general corporate requirements.
Yesterday the rupee was quoted at Rs 330.95/331.05 to the US dollar in the spot market, weaker from Rs 330.85/95 the previous day, while bond yields were quoted broadly steady, dealers said.
Business
Huawei continues to showcase practical AI applications at Sri Lanka AI Week 2026
Sri Lanka AI Week 2026 continued into its second day bringing together government, industry, academia and technology partners to explore practical applications of artificial intelligence. As the AI Technology Partner for the second consecutive year, Huawei showcased 18 use cases spanning government, education, finance, industry, green energy and everyday life, demonstrating how AI can be applied to real-world needs.
Prime Minister Dr. Harini Amarasuriya visited the Huawei exhibition together with officials from the Ministry of Education, Higher Education and Vocational Education, experiencing the Smart Classroom, AI in Education and MindGraph by Beijing Normal University demonstrations. The Smart Classroom demostration highlighted how connected technologies can bring teachers and students in different locations into a shared learning environment, while the AI in Education showcase demonstrated how AI can support teachers, enhance learning and enable more personalised education. The Prime Minister praised the efforts of the Ministry of Education, Higher Education and Vocational Education, Huawei and their partners to demonstrate practical applications of AI in education, noting the role of technology in supporting teachers, expanding learning opportunities, and advancing a more inclusive, equitable and future-ready education system.
Later in the day, Deputy Minister of Digital Economy Eng. Eranga Weeraratne, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe, Secretary to the Ministry of Digital Economy Waruna Sri Dhanapala, and Chinese Ambassador Wei Huaxiang visited the Huawei exhibition and explored the AI Hands-On Classroom AI Empowering Industry, AI in Education and Smart Classroom demonstrations. Deputy Minister Weeraratne praised Huawei’s practical approach to showcasing AI applications, noting their relevance to Sri Lanka’s digital transformation across education, industry and skills development. The engagement also extended across the wider AI ecosystem, with industry professionals, technology partners, academics and other visitors engaging with the demonstrations and expressing appreciation for Huawei’s practical approach to applying AI across different areas of society and the economy.
Daniel Wu, CEO of Huawei Sri Lanka, said that Huawei will continue bringing global experience, technology and ecosystem resources to Sri Lanka, while working side by side with local partners to build local capabilities, develop local talent and create real value for the country. “I believe that by working together, we can make AI not only more intelligent, but also more local, more inclusive, and more meaningful for everyone,” he said.
-
Editorial7 days agoColombo Port drug bust: The plot thickens
-
Features5 days agoThe first woman in the foreign service or Ceylon Overseas Service it was then called
-
Editorial6 days agoFuelling discontent and protest
-
News4 days agoGeneva takes up Sallay’s case and govt. ignores opportunity to answer accusations
-
Foreign News5 days agoTen injured after car crashes into rugby supporters in Australia
-
Latest News6 days agoTharindu Rathnayake, bowlers secure Asian Games Bronze for Sri Lanka
-
News5 days agoNearly 20 Iranian tankers stranded off Lanka amid US sanctions
-
Features4 days agoSri Lanka Cricket Bill: Governance reform is not yet a cricket strategy
