Business

CBSL to continue with low interest rates and liquidity injections

Published

2 years ago

2021/03/5

By Hiran H.Senewiratne

The Central Bank will continue with low interest rates and liquidity injections, made through debt monetizations, Governor, Central Bank Prof W.D. Lakshman said.

“The Board arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts, the Governor told the Monetary Board monthly review meeting held at the Central Bank yesterday.

Lakshman said that the Board noted the recent slowdown in credit disbursements to the private sector and inadequate lending to productive sectors of the economy and stressed the need for the financial system to actively lend to productive sectors in order to support the ongoing recovery of domestic production-based economic activity.

“Further, the Board observed the recent uptick in certain market interest rates and re emphasises its commitment to continue the low-interest rate structure until the economy shows signs of sustained revival, in the context of the low inflation environment, the Governor said.

‘The Monetary Board of the Central Bank of Sri Lanka at its meeting held on March 3 decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 percent and 5.50 percent, respectively, he explained.

“The Bank expects the Sri Lankan economy to make a notable recovery in 2021, supported by policy stimulus and improving business sentiments, Lakshman said.

The Governor added – “Given the low inflation environment, the Central Bank is in the process of actively supporting the government’s economic agenda focused on developing a production-based economy. Positive sentiments fuelled by the COVID-19 vaccination drive in the country and the impact of growth promoting policies are expected to support the economic revival over the short to medium term.

‘According to the review, monetary policy easing measures implemented since early 2020 have resulted in historically low interest rates.

‘While many market interest rates have declined to their historic lows, certain market interest rates, such as yields on government securities, have shown unwarranted volatility recently, which is not in line with monetary policy expectations.

‘The Central Bank reiterates that the high level of excess liquidity in the money market and the reduction in policy interest rates thus far are intended to result in a stable low interest rate environment, while providing a positive real return to savers.

‘We expect the inflation to remain subdued during the remainder of the year supported by the envisaged improvements in domestic supply conditions, which would also contribute towards maintaining inflation in the targeted range of 4-6 per cent over the medium term.

‘The Central Bank will continue to monitor domestic and global macroeconomic and financial market developments and take further proactive measures to help the economy to reach a sustainable high growth trajectory, while maintaining inflation in the targeted 4-6 per cent range under the flexible inflation targeting framework.’

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Business

Cabinet approves rationalization of VAT exemptions and abolition of SVAT System

Published

3 hours ago

2023/06/6

Priyan

The Cabinet of Ministers granted concurrence to the resolution forwarded by the Minister of Finance, Economic Stabilization and National Policies to remove most of the releases from Value Added Tax (VAT), further retaining releases that ease the pressure on low – income families to secure the fundamental sectors of the economy as well as the releases for sectors such as education, health and agriculture, as well as to revise the provisions applicable for the Value Added Tax (VAT) act so that the Simplified Value Added Tax (SVAT) methodology can be canceled with effect from 01.01.2024 by introducing a more formal methodology for repaying the Value Added Tax (VAT) and to instruct the Legal Draftsman to prepare a draft bill for the purpose.

Business

Venora Lanka Power Panels to set up assembly plant in Australia

Published

8 hours ago

2023/06/6

Sahan Weerasooriya

Sagara Gunawardene

By Hiran H.Senewiratne

Sri Lanka- based, export- oriented manufacturer, Venora Lanka Power Panels (Pvt) Ltd, with a state of the art electric panel factory at the Export Processing Zone, Biyagama, will set up an assembly plant in Australia.

“Once we set up the electric panel assembly plant in Australia, we will export all our panels from Sri Lanka and that plant will do 30 percent value addition to the product to supply that market, the company’s chairman/ Managing Director, engineer Sagara Gunawardena told The Island Financial Review.

Gunawardena said that the company is a value- addition assembly plant and he would be investing AUS $ 2 million for the project to be set up in Melbourne and hire 100 engineers and other professionals. He explained that the venture has enormous potential.

Venora Lanka provides power panels to mega projects in Sri Lanka and exports to Bangladesh, Maldives, Kenya, Ethiopia, Seychelles and Myanmar. Panel assembling is strictly in compliance with IEC 61439 standards, it was explained.

Gunawardena added: ‘I firmly believe that, being a truly customer focused organization, every employee and every process in the organization has to be aligned behind delighting customers. Therefore, at a time when the country is facing a major dollar crisis, my company would be aiming at bringing dollars into the country, while providing employment for local professionals, especially engineers.

‘At Venora Lanka we do not try to change customers’ mindsets. Instead, we take time to understand what they really want and focus our brand on delivering that. Venora is values- driven first and cost- driven second – creating a unique brand proposition.

‘Since the US dollar rate has come down, it is our concern that importers and suppliers do not change their prices, which is really affecting the manufacturing sector.

Company sources added: ‘The company has several wings of operation, such as local and overseas projects, switch board assembling, telecommunication infrastructure installations, earthing, lighting and surge protection, incorporating world renowned brands.

‘Venora Lanka Power Panels is the first Sri Lankan company to receive the licence, in accordance with the UK Trade Mark Act 1994, to use the trade mark “Best Enterprise”. It won a global award at the event, ‘Golden Awards for Quality and Business Prestige’, held in Geneva, Switzerland, in 2015.

‘Within a short span of time, with the perfect blend of progressive thinking and expertise, Venora Group has expanded to consist of, Venora International Projects, Venora Telecom, Venora Industrial Solutions and Venora Lanka Power Panels (BOI approved). Further, Venora has established its overseas presence through Venora Engineering Kenya and Venora Engineering Myanmar.’

Business

Share market moves into positive territory; indices up

Published

8 hours ago

2023/06/6

Sahan Weerasooriya

By Hiran H. Senewiratne

CSE trading got off to a positive note yesterday but during the last session of the day the momentum slowed. However, the market is now moving towards positive territory following the Central Bank announcement of a downward trend in interest rates, market analysts said.

Amid those developments the market witnesses improvements in both indices and in the turnover.

The All- Share Price Index up by 12.8 points and S and P SL 20 rose by 6.97 points. Turnover stood at Rs 710 million with one crossing. The crossing was reported in JKH which crossed 430,000 shares to the tune of Rs 60.2 million; its shares traded at Rs 140.

In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 212 million (1.5 million shares traded), Access Engineering Rs 44.7 million ( three million shares traded), Lanka IOC Rs 34.5 million (264,000 shares traded), Browns Investments Rs 28.6 million (5.3 million shares traded), LOLC Finance Rs 23.8 million (4.7 million shares traded), Capital Alliance Rs 22.9 million (615,000 shares traded) and First Capital Holdings Rs 19.2 million (574,000 shares traded). During the day the 31.4 million shares volumes changed hands in 9000 transactions.

Yesterday, the Central Bank’s US dollar buying rate was Rs 285.16 and the selling rate Rs 298.85.