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CBSL: Adjustments made to external debt according to international standards

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It was an ‘accounting gimmick’, says Opposition MP

By Sanath Nanayakkare

The internationally accepted practice was to classify domestic debt and external debt based on the resident or non-resident status of the holder of such debt, Dr. Chandranath Amarasekara, the Director Economic Research at the Central Bank told The Island yesterday.

Dr. Amarasekera said so when he was asked to explain why the Central Bank had decided to reclassify US$ 2.2 billion worth of international sovereign bonds held by local entities as domestic debt.

“We did not have accurate information on ISB holdings by the resident/non-resident status of the holder, and accordingly a new survey was commenced in 2020 to collect this information, and this survey is continued on a monthly basis. According to the survey, ISB holdings of resident banks was around USD 1.1 billion at end 2019, which increased to over USD 2.2 billion by end 2020. With this new information, adjustments were made to external debt for 2019 and 2020. This does not mean that they are not shown in total government debt. The total gets the same treatment, while this was only a reclassification within the given total, where the entire ISB liability at face value of USD 15.05 billion at end 2019 and USD 14.05 billion at end 2020 are included in the outstanding government debt. Nevertheless, the international norm of reporting ISB liabilities at market value has been continued in relation to external statistics, as practiced in the past.” he explained.

When asked whether these sovereign bonds now shown in the books as domestic debt are going to be repaid in rupees, Dr. Amarasekara denied it saying, “Definitely not. This is similar to Sri Lanka Development Bonds which are mostly held by resident entities being repaid in US dollars. Also, it is the same with foreign currency loans taken by the government in USD from offshore banking units of local banks. They are also repaid in US dollars. In addition, we have continued to report non-resident holdings of Rupee denominated Government Securities as external debt although they are repaid in Rupees.”

The Island posed those questions to the Director of Economic Research of the Central Bank as Opposition MP Dr. Harsha de Silva questioned on Friday as to how Sri Lanka’s foreign debt stock was reduced suddenly.

“In fact, a big accounting gimmick has been performed this time. The Central Bank Annual Report states that ISBs to be repaid by Sri Lanka are about US$ 14.1 billion. Out of this, US$ 2.2 billion worth of sovereign bonds were bought by local entities like banks in the secondary market this year. Through an accounting gimmick, these ISBs have been accounted as domestic debt instead of foreign debt and thus it has been taken away from the foreign debt stock. But therein lies the hitch; to whomever it is to be repaid, it has to be settled in US dollars,” Dr. De Silva argued.

According to the Central Bank’s Annual Report, out of outstanding US$ 14,050 million of ISBs issued, US$ 2,230 million was held by domestic entities by end 2020, up from 1,113 million in 2019.



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People to get fuel price shock soon

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The Cabinet sub-committee on the cost of living had decided to increase fuel prices, Energy Minister Udaya Gammanpila told the media yesterday (11) in Colombo. He said that the date of the price hikes  would be revealed soon.

The Minister said that if they announced the date, it would lead to long lines at filling stations and it would have disastrous consequences during the pandemic.

“We know that things are hard for everyone, that is why we didn’t increase fuel prices for 21 months. But the government can no longer bear the losses. The oil prices in the world market have been increasing. By the end of 2020, the Ceylon Petroleum Corporation (CPC) had accumulated a loss of RS. 331 billion. Each year we spend three billion dollars to import oil,” he said.

Gammanpila said that the main sources of income for the country had been affected due to the pandemic and foreign investments and tourism had stopped and a large number of Lankans working abroad had returned, decreasing remittances.

Prime Minister Mahinda Rajapaksa’s Office on May 20 said that a ministerial subcommittee discussed the sharp increase in crude oil prices compared to 2019 and 2020.

The PM chaired the meeting in the Committee Room 8 in Parliament. The Cabinet subcommittee discussed ways and means of addressing the problems caused by the crude price hike.

The PM’s Office said that ministers had discussed how to sustain public relief in the wake of further increase in expenditure. The subcommittee discussed the financial problems of the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB), among other things. The PM’s Office said that ministers had discussed how to sustain public relief in the wake of further increase in expenditure. The subcommittee discussed the financial problems of the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB), among other things. (RK)

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HRC asks IGP to explain how he intended to stop deaths of suspects in police custody

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Report called by June 13

By Shamindra Ferdinando

The Human Rights Commission has sought an explanation from IGP C.D. Wickremaratne as regards continuing deaths in police custody.

In a letter dated June 8, 2021, HRC Chairman Dr. Jagath Balasuriya has raised the recent deaths in police custody with the focus on two incidents involving Panadura and Batticaloa police.

HRC Acting Director Research and Monitoring Nihal Chandrasiri told The Island that the June 8 dated letter was the latest missive addressed to the IGP regarding this particular issue since the formation of the new HRC following the last general election in August 2020.

Chandrasiri made available to The Island, a copy of Dr. Balasuriya’s letter addressed to IGP Wickremaratne.

President Gotabaya Rajapaksa in late Dec 2020 named former lawmaker Balasuriya as the Chairman of the HRC comprising· Dr. M.H. Nimal Karunasiri, Dr. Vijitha Nanayakkara, Ms. Anusuya Shanmuganathan and H.K. Navaratne Weraduwa.

Chandrasiri said that the HRC first took up deaths in police custody in the wake of the killing of Dinithi Melan alias Uru Juwa, who had been arrested by the Nawagamuwa police, and Dharmakeerthi Tharaka Perera Wijesekara alias Kosgoda Tharaka in the second week of May 2021.

Civil society activist attorney-at-law Senaka Perera told The Island that continuing deaths in police custody should be examined against the backdrop of a landmark judgment, the Supreme Court of Sri Lanka delivered that the extra-judicial killing of a suspect in police custody violated the right to life, in spite of the absence of an explicit right to life clause  in the Constitution of Sri Lanka.

According to Dr. Balasuriya’s letter, reportage of the deaths of Chandana Vidushan and Ali Khan in the custody of the Batticaloa police and Panadura (North) police, respectively, prompted the HRC to take up the matter with the IGP. Declaring that the HRC has initiated an inquiry in terms of Section 14 of the Human Rights Commission of Sri Lanka Act, No.21 of 1996, Dr. Balasuriya said that inquiries revealed both victims suffered cruel and inhuman treatment in the hands of the police, leading to their deaths?.

Expressing serious concern over what he called the absence of safety and security of those in police custody, Dr. Balasuriya has pointed out to the IGP relevant sections of the Constitution, in addition to Supreme Court rulings in respect of such matters and two letters dated Oct 21, 2020 and  March 17, 2021 that dealt with the issue at hand.

Asserting that continuing deaths in police custody resulted in deterioration of public confidence in law and order, such incidents underscored the threat to what he called public freedom. Having reminded the IGP that the HRC intervened in terms of the Human Rights Commission of Sri Lanka Act, No.21 of 1996, Dr. Balasuriya has requested the IGP to submit a report to him of measures he intended to introduce to prevent deaths in police custody by or before June 13.

In the wake of several killings in police custody, Romesh de Silva, PC, recently moved the Court of Appeal on behalf of convicted heroin dealer Gampola Vidanalage Samantha Kumara alias Wele Suda held at maximum security Boossa prison. President’s Counsel successfully argued against the police taking Wele Suda into their custody.  

President of the Bar Association of Sri Lanka (BASL) President’s Counsel Saliya Pieris has appeared in the Court of Appeal on behalf of Janith Madushankar alias Podi Lassi. Having brought to the notice of justices, Sobitha Rajakaruna and Dhammika Ranepola, the most recent killings in police custody of ‘Uru Juwa’ and ‘Kosgoda Tharaka,’ Peiris sought the court’s intervention to ensure his client’s safety and security.

The lawyer has requested that the court direct the IGP to transfer his client from the custody of the CID to another unit.

 

 

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Health trade union alliance claims their strike a success

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By Rathindra Kuruwita

Senior health officials including doctors benefited from the current health crisis, Health Services Trade Union Alliance (HSTUA) President Saman Rathnapriya said yesterday commenting on the trade union action resorted to by a number of health sector unions, excluding the GMOA.

Rathnapriya maintained that the strike was a success and non-health sector unions  too had supported them because what he called unfair increases in allowances received by doctors affected the entire state sector. The allowance given to doctors had been increased by 78%, from Rs. 41,220 to Rs. 78,120, however other categories had not received any increase in their allowances, he said.

“Our union action was a success, but we are not happy we had to do this. Nurses and other staffers have not received any increase in their allowances although they too are contributing greatly in the fight against COVID-19. The Health Ministry is unnecessarily creating issues by giving a colossal allowance increase to the doctors,” Rathnapriya said.

College of Medical Laboratory Science (CMLS) President Ravi Kumudesh said that the doctors held top positions in the Health Ministry and for many years they had been ignoring the salaries and allowances of other employees.

“They not only mistreat us but create new issues, testing our patience. Throughout this pandemic you can see this. They get all the perks and have even their family members vaccinated. They are taking advantage of the fact that we are exercising patience in view of the pandemic,” Kumudesh said.

Kumudesh added that the union action had not affected the anti-COVID-19 programme, cancer, maternity and paediatric hospitals, etc.

“We are not doing this to inconvenience the people. We are trying to ensure that the Health Ministry does not create additional problems,” he said

President of All Ceylon Management Service Officer’s Union, Udeni Dissanayake said that they too supported the trade union action because the actions of the GMOA would have an adverse impact on the entire state sector.

Doctors had received certain perks in recent years, and they had contributed to salary anomalies and inequality of remuneration across the board, he said.

“Doctors were treated with great respect in our culture, and this is being eroded by the actions of the GMOA. They have been receiving allowances increased and after a while those of similar standing in other sectors, too, ensure that they get hikes, but those in the lower grades do not see any increase. Although we are not a health sector union, we fully support this action for two reasons. One is that the cause is just and the other is that the impact of the allowance hike given solely  to the doctors will soon be felt by us,” Dissanayake said.

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