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Central Bank says inflation is on target despite food price pressures

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Dr. Chandranath Amarasekara, Director of Economic Research at the Central Bank of Sri Lanka

by Sanath Nanayakkare

While it is correct to say that the cost of living is rising particularly in terms of food prices, the Central Bank observes that inflation is well anchored broadly within the target range of 4-6 per cent, Dr. Chandranath Amarasekara, Director of Economic Research at the Central Bank of Sri Lanka told the Island Financial Review (IFR) yesterday.

IFR put this query to the Central Bank as many people are often heard complaining about rising food prices adding that there is no mechanism in place to stem it. A consumer in Delgoda told this reporter that a grocery retailer who offers best prices in the area sells Nipuna Samba at Rs.117.50 a kilo, white sugar at Rs.126 a kilo, brown sugar at Rs. 134 a kilo and canned fish Mackerel at Rs. 260 and edible B-onion at Rs. 250 a kilo though the gazetted (regulated) prices for these essential food items are much lower than that. He had bought turmeric curry powder at Rs. 300 per 100grams.

“As you have observed, cost of living is rising though non-food prices are rising slowly. Maintaining inflation in the target range does not mean that cost of living does not increase”. Dr. Amarasekara said.

Elaborating on what he termed as a nationally important subject, he said, “The Central Bank observes that inflation is well anchored broadly within the target range of 4-6 per cent. Year-on-year inflation based on the Colombo Consumer Price Index (CCPI) was at 4.8 per cent at end 2019 and remained at 4.0 per cent by October 2020. Year-on-year inflation based on the National Consumer Price Index (NCPI), which was at 6.2 per cent at end 2019, remained higher at 6.4 per cent by September 2020”.

“The above figures show that there is indeed inflation, displaying that cost of living is rising at these rates on average. For example, compared to prices of the representative consumption basket last year, prices are 4.0 per cent higher in October 2020 if you consider the CCPI basket. If you compare the NCPI basket, average prices are 6.4 per cent higher. However, what the Central Bank is aiming to do is to maintain these increases on average between 4-6 per cent on a year-on-year basis. From what we know from the Sri Lankan experience as well as experiences of other countries is that excessive inflation as well as deflation is not good for an economy, and this is why the Central Bank aims to maintain inflation between 4-6 per cent”.

“When you compare CCPI and NCPI, you will also notice that inflation is higher at the national level than in Colombo. This is because the food category in the consumption basket is relatively small in Colombo – people spend more on other goods – compared to the national average. You see that food prices have remained at high levels, and this is what people mostly feel as high inflation. In fact, if you consider food inflation in the CCPI basket, it was 6.3 per cent at end 2019, but was at 10 per cent in October 2020. Food inflation in terms of NCPI, which was 8.6 per cent at end 2019 has risen to 12.7 per cent by September 2020. Throughout 2020, food inflation has remained at double digit levels,” he said.

“The government is monitoring food inflation closely and has taken several measures to regulate prices of food supplies. In addition, the ongoing drive to promote domestic food production will also result in considerable gains in the period ahead, thereby allowing food inflation to subside”, Dr. Amarasekara said.

Meanwhile, a resident at Mount Lavinia told the IFR that retail grocery shops in the area face a supply disruption due to the prevailing situation in the country which has obviously led to increases in food prices.

A resident in Kottawa said,” Grocery shops here don’t have samba rice. They have enough stocks of Keeri Samba sold at Rs. 120 a kilo”.



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Galadari Colombo awarded ‘SLIM People’s Hotel Brand of the Year 2021’

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The Galadari Colombo was given a thumbs up from the people as the People’s Hotel Brand of the Year for the second time running at the recently concluded SLIM (Sri Lanka Institute of Marketing) People’s Awards 2021.

The uniqueness of the SLIM People’s Awards is the fact that it is awarded by the public which shows the popular choice of the Sri Lankan people.

This is the 15th successful running of the much-anticipated event conducted by SLIM in association with Nielsen which is globally renowned for its measurement and consumer insights.

Having stood the test time of time in the hospitality industry for more than 3 decades the Galadari Colombo is hopeful to remain in the hearts of its people as a brand that is trustworthy and dedicated to service.

 

 

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Expatriates’ organization painting competition for Sri Lankan children from care homes highlights close India-Sri Lanka ties

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Celebrating 75 years of India’s independence in Sri Lanka, Sri Lankan children from care homes converged in Colombo from all across Sri Lanka over 10-11 April 2021 for the final round of the nationwide painting competition organized by Colombo Expatriates Cultural Association (CECA) – a voluntary organization of expatriates consisting of mainly Indians – with support of the High Commission of India, Ministry of Education of government of Sri Lanka and several other partners.

Prof. G.L Peiris, Minister of Education was the Chief Guest and Gopal Baglay, High Commissioner of India was the Guest of Honour at the final round. Several other dignitaries including State Minister Piyal Nishantha were also present. The dignitaries lauded the effort as a shining example of strong people-to-people ties between India and Sri Lanka and stressed the enormous significance of the enriching experience for the children.

The competition was held in three categories – Sub Junior, Junior and Senior. The first round of the competition had seen enthusiastic participation of 4,375 students from child care homes across Sri Lanka. Contestants from all provinces who had produced sixty best paintings were invited along with one care-giver for the final round held in Colombo on April 10 at Hotel Taj Samudra. While top three winners in all the three categories were awarded SLR 100,000, SLR 75,000 and SLR 50,000 respectively in addition to various other gifts, certificates and medals, all the 60 finalists received cash awards, desktop computers, and other gifts contributed by various sponsors.

The event also formed part of ‘India @ 75’ celebrations in Sri Lanka which comprise events and activities in the run up to completion of 75 years of India’s Independence in August 2022. Prime Minister of India Shri Narendra Modi had launched these celebrations in India on March 12 2021, 75 weeks before the 75th Anniversary of Independence. In Sri Lanka, formal launch of these celebrations had taken place on April 9 2021 with the inauguration of ‘India Corner’ at the Nagananda Institute for Buddhist Studies.

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Chrissworld to raise Rs. 56.25 million through IPO

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By Hiran H.Senewiratne 

Chrissworld Ltd. (CWL), an SME company  engaged in the provision of third-party logistics (3PL) services, is gearing to raise up to Rs. 56.25 million via an initial public offering (IPO) on the Colombo Stock Exchange, sources said.

The company plans to offer 7,500,000 Ordinary Voting Shares for subscription at Rs. 7.50 per share. The subscription will open on April 27, with Atara Capital Partners representing the company as managers to the issue.

Meanwhile, the CSE noted in a statement that it has approved an application submitted by Chrissworld Ltd. for the listing of its Ordinary Voting Shares by way of an offer for subscription on the Empower Board of the CSE.

The company,  starting off with Rs. 6 million capital in 2019, expanded its capital to Rs. 22.5 million and projects to obtain Rs. 79 million after the IPO.

Chrissworld will be earmarking milestones with the IPO as the first to be listed on the Empower Board, CSE’s newest listing platform, dedicated to SMEs. Further, Central Depository Systems (Pvt.) Ltd., a subsidiary company of CSE, will step in for the first time as the registrar to the issue.

Amid those developments the CSE  started  on a bullish note yesterday and during the latter part of the day with heavy retail investor participation the CSE witnessed a bullish trend. It is said that manufacturing sector counters became the most popular stocks during the day. Notable price appreciation was reported in Hayleys Group, Royal Ceramic Group and  Distilleries.    

Both indices moved upwards. The All Share Price Index went up by 100.10 points and S and P SL20 rose by 49.18 points. Turnover stood at Rs. 3.51 billion with a crossing. The crossing was reported in JKH, which crossed 1.32 million shares to the tune of Rs. 199.3 million and its share price was Rs. 151.

In the retail market, companies that mainly contributed to the turnover were; Royal Ceramic Rs. 511.2 million (1.46 million shares traded), Expolanka Holdings Rs. 359.9 million (4.5 million shares traded),  Hayleys Group Rs. 359.9 million (4.5 million shares traded), Dipped Products Rs. 321 million (5.5 million shares traded), JKH Rs. 290 million (1.9 million shares traded), and Haycarb Rs. 177 million (1.5 million shares traded). During the day 87.8 million share volumes changed hands in 23900 transactions.

Hayleys shares appreciated by Rs. 6 or eight percent. Its shares started trading at Rs. 75.90 and at the end of the day they moved to Rs. 82. Royal Ceramic shares appreciated by Rs. 13.5 or nine percent. Its shares started trading at Rs. 328.25 and at the end of the day they moved to Rs. 358.75. Expolanka shares appreciated by Rs. 2.70 or five percent. Its shares  started trading at Rs. 49.70 and at the end of the day they shot up to Rs. 52.40 and Distilleries shares appreciated by 70 cent or 3 percent from Rs. 20.20 to Rs. 20.90  

Sri Lanka’s rupee quoted steady at 202.00/203 to the one month US dollar Monday, while gilt yields remained unchanged, dealers said.

The rupee last closed in the one-week forward market at 202/203 to the US dollar on Friday. Sri Lanka markets were dull as seasonal bliss kicks in.

 

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