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CB optimistic about controlling runaway inflation

By Shyam Nuwan Ganewatta
Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe yesterday (19) said there was some political and social stability in the country and it would help the CBSL achieve some success in its endeavours.
Dr. Weerasinghe said so responding to a question posed by a journalist about the Governor’s earlier claim that he would resign from his post if political stability could not be restored within two weeks.
“Now, we have a Prime Minister. We have a cabinet. The Parliament is in session. We expect that a Finance Minister will be appointed soon. There is no violence now. Peaceful protests and demonstrations do not affect political and social stability. I think the country is on the right track. Most MPs have expressed a desire to work together. I think things will become more stable soon,” he said.
Inflation in Sri Lanka would decrease in the coming months due to the corrective policy measures of the Central Bank and the expected improvements in both domestic and global supply conditions, the Central Bank has said in a press release (19).
Inflation is projected to escalate in the near term on account of domestic supply shortages, increased global commodity prices, the effects of the large depreciation of the Sri Lanka rupee against the US dollar thus far during the year, along with the impact of aggregate demand pressures.
“However, this will change in the coming months and the bank expects that the recent tightening of monetary conditions and the strengthening of monetary policy communication will help anchor inflation expectations of the public in the period ahead.
“The Central Bank expects to minimize excessive volatility in the domestic foreign exchange market through tightening of the monetary policy stance, restrictions on imports on open account terms, and the reduction in the proportion of mandatory foreign exchange sales by the banks to the Central Bank.
“The Central Bank expects an increase in workers’ remittances due to the notable reduction in the gap between the official exchange rate and the rate offered by the grey market and the continued increase in migration of workers.
“The near term outlook of the tourism sector is likely to remain unfavourable due to both global and domestic factors.
“Meanwhile, gross official reserves as of end April 2022 were provisionally estimated at US dollars 1.8 billion, including the swap facility from the People’s Bank of China equivalent to around US dollars 1.5 billion, which is subject to conditionalities on usability.”
The Central Bank and the government have commenced technical level discussions with the International Monetary Fund aimed at working towards a programme to address the macroeconomic challenges faced by the economy while expeditious arrangements are being made to commence the external debt restructuring process.
“Negotiations have already begun with bilateral and multilateral partners to obtain bridging finance in order to secure foreign exchange required to finance imports of essential goods and strengthen the social safety net programmes.
“Economic activity is expected to be affected considerably by the ongoing supply shortages, energy related issues and social tensions, as reflected by several leading indicators. Demand management policies of the Central Bank and anticipated fiscal consolidation measures are also expected to keep aggregate demand subdued during the year.
“Global economic growth is also expected to moderate in response to the tightening of monetary policy by the central banks globally to counter inflationary pressures along with the spillover effects of the geopolitical tensions in Eastern Europe.
“After carefully considering the current and expected macroeconomic developments both globally and domestically, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 18 May 2022, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at the current levels of 13.50 per cent and 14.50 per cent, respectively.
“The Board was of the view that the policy measures that have already been implemented by the Central Bank would continue to be further transmitted to the financial markets, while some signs of tighter monetary policy are already being observed in real economic activity. The Central Bank would continue to monitor domestic and global macroeconomic and financial market developments and stand ready to take appropriate measures proactively to help reinforce greater macroeconomic stability in the economy in the period ahead.”
“In order to prevent further deterioration of economic conditions and complement the efforts of the Central Bank implemented thus far, urgent measures are required to restore greater political stability through consensus governance and social harmony.
“In addition, swift policy actions are required to strengthen the fiscal performance that would help avoid excessive reliance on monetary financing and maintain fiscal sustainability over the medium term. Furthermore, expeditious and transparent revision of tariffs in the energy sector remains a priority in order to strengthen the financial position of energy-related state owned business enterprises, while improving the efficiency of social welfare programmes to support the vulnerable groups of the society impacted by the unprecedented economic circumstances.”
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In order to create a better standard of living for the people, political authorities and public officials must engage in a coordinated mechanism – President

President Anura Kumara Dissanayake emphasised that, while steering the country forward economically and improving the people’s standard of living, political authorities and public officials should be integrated into a unified system.
The President stated that no one can work in isolation and he called upon everyone to support the government’s initiatives aimed at benefiting the public.
President Anura Kumara Dissanayake made these remarks on Friday (11) morning while attending the Hambantota District Special Coordination Committee meeting held at the auditorium of the Hambantota District Secretariat.
Issues and challenges in the district’s development activities were extensively discussed, including problems in the agriculture, fisheries, health, education, rural roads, land and irrigation sectors, along with potential solutions and the successful implementation of the digitalisation programme.
The allocations made through the 2025 Budget for ministries, departments and institutions, as well as the progress of ongoing projects and those planned to commence before the end of this year using these funds, were also reviewed.
Although Rs. 574 million has been allocated for the Hambantota District this year under the Southern Province Development Programme, it was revealed that only about Rs. 23 million has been spent so far, amounting to approximately 4% progress.
The President questioned officials about this and stressed the need to properly utilise the relevant allocations to meet public needs before the end of 2025.
Land issues, including the clearance of lands belonging to the Mahaweli Authority, were also discussed. The President emphasised that, instead of granting land to various authorities and for irregular transactions, the country needs a culture of allocating land to suitable individuals for economically productive purposes.
The President also instructed that a proper review be conducted of the school system in the Hambantota District and that a comprehensive plan be presented. He emphasised that this plan must ensure quality education for all children, effective management of human resources, and optimal use of available resources.
The President pointed out that problem cannot be solved through emotions or assumptions and that a structured data system is essential. He stated that data should be analysed and used as the foundation for formulating solutions.
Attention was also drawn to problems within public institutions, including staff shortages. The President stated that the government has prepared plans to revitalise the weakened public service, including recruiting 30,000 new employees after a gap of five years. He also noted that the upcoming budget is expected to allocate funds for providing essential vehicles to facilitate the duties of officers, including Divisional Secretaries.
The President also reviewed matters concerning the Hambantota Elephant Management Reserve. He stressed the importance of implementing the proposed elephant corridor project by acquiring the identified lands, regardless of whether they belong to the public or private sector.
Agricultural issues in the district, along with problems related to the fisheries harbour, were also discussed, including potential short-term and long-term solutions.
Attention was also drawn to a letter submitted by health officials requesting Rs. 70 million to complete the construction of the kidney unit at the Hambantota District General Hospital. The President said he would personally intervene and discuss the matter with the Treasury to secure the required funds.
The President noted that while in the past a country’s development was measured by the construction of large buildings, today it is measured by technology. He stated that digital transformation within the next five years is a key government objective.
The President highlighted the importance of creating a cultural shift among citizens. He announced that the upcoming month of September would be declared as the month for promoting a digital culture in the country, with awareness programmes being planned.
The President further stated that our country should be recognised with a new identity in the digital world and that the digital ID will mark a new milestone in that journey.
Also present at the occasion were Co-Chairpersons of the Hambantota District Coordination Committees, Southern Province Governor Bandula Harischandra and Member of Parliament, Nihal Galappaththi; Deputy Minister of Provincial Councils and Local Government Ruwan Prabha Senarath; Hambantota District MPs Aravinda Senaratne Witharana, Athula Welandagoda, and Saliya Sandaruwan Madurasinghe; Chief Secretary of the Southern Province Sumith Alahakoon; representatives of local government institutions; Hambantota District Secretary Bimal Indrajith de Silva; as well as government and security sector officials from the district.
News
Anemia among adolescent girls and women is a serious concern— Prime Minister

Prime Minister Dr. Harini Amarasuriya participated as the Chief Guest at the inauguration ceremony of the international conference titled “Nourishing South Asia” on Wednesday [9th of July] at the Cinnamon Lakeside, Colombo, with the aim of reducing anemia among young women and children in South Asia
Addressing the event, Prime Minister stated:
“First of all, I would like to extend my sincere thanks to the organizing committee for inviting me to a conference of such regional significance. The goal of this conference is ’to build a South Asia where no adolescent girl or woman suffers from preventable anemia, and to remain committed to that cause.’ In order to achieve this goal, we must ensure that every girl has access to nutritious food, health education, and quality care. At the same time, we must create an environment that enables women to realize their full potential and empowers them to do so.
This aim cannot be accomplished alone by the government itself. That is why this conference is designed to be a platform for renewed commitment and practical action from all sectors of society that support and strengthen our shared goal.”
Addressing further, Prime Minister stated that the issue of anemia among adolescent girls and women is a serious concern, but not something that cannot be prevented. “Through renewed commitment, regional cooperation, and collective action, we can nourish future generations across South Asia and we can build a healthier, more equitable society by breaking the cycle of malnutrition. This is both the hope and belief of myself and our government. I would also like to reiterate here that as a government, we are fully committed to this cause. Our nutrition program, which targets schoolchildren, aims to ensure they receive adequate nutrition and are protected from malnutrition.
I look forward with great expectation to the fruitful discussions, valuable exchanges of ideas, and practical commitments that will emerge from this conference.
I would like to propose this vision that let us unite as a region and pledge our dedication to reducing and eliminating anemia among women and girls through strong regional collaboration. By nurturing our women and young girls, we can nourish the entire South Asian region.
I hope that while experiencing the warm hospitality and unique beauty of our lovely country, your stay here will be both professionally fulfilling and personally memorable.
[Prime Minister’s Media Division]
News
Let’s build a nation rooted in historical heritage – President

President Anura Kumara Dissanayake stated that a society cannot progress without a meaningful connection to its historic heritage and that the nation’s development path must be chosen accordingly.
The President made these remarks while addressing a ceremonial gathering on Thursday (10) afternoon at the historic Ruhunu Kataragama sacred site.
Earlier in the day, President Dissanayake visited the sacred grounds of Kataragama, participated in religious observances and later paid a courtesy call on the Venerable Kobawaka Dhamminda Nayaka Thera, the Chief Incumbent of the historic Kirivehera Rajamaha Viharaya, inquiring about his well-being and engaging in a brief discussion.
The President also attended the final Randoli Maha Perahera of the annual Esala Festival at the Ruhunu Kataragama Maha Devalaya,
Addressing the gathering, President Dissanayake further emphasised that a nation can only move forward by maintaining continuity with its historic heritage. He noted that every developed country in the world has achieved progress by preserving its historical legacy and building upon it, stressing that Sri Lanka, too, must choose a development path anchored in its heritage.
The President highlighted that Buddhism played a pivotal role in transforming our society into a cultured civilisation and that cultural festivals like this help revive and strengthen the moral and social values of a society often preoccupied with material pursuits.
He pointed out that the Ruhunu Kataragama Perahera has been held continuously for 2,186 years, spanning nearly a hundred generations and that its survival has been possible due to the deep connection between this cultural ceremony and the lives of the people. The President extended his gratitude to all those, who contributed to the success of this year’s procession.
[PMD]
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