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Economic managers aiming at 1 per cent growth rate for SL

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By Hiran H.Senewiratne

Local economic managers are trying their level best to keep the GDP growth rate at one percent but during the first quarter of the year the economy contracted by 1.6 percent due to external and internal factors, including the COVID 19 pandemic.

“We expect economic growth to be at least one percent for the entire year but the first quarter growth was minus 1.6 percent, as stated by the Department of Census and Statistics, which has several issues when calculating the growth rate. Therefore, we will be rectifying those issues in the future, working together with the Census and Statistics Department, Central Bank Governor Professor W.D Lakshman told the media yesterday.

‘As per the available indicators, the adverse impact of COVID-19 on economic activity during the second quarter of 2020 is likely to be substantial, Lakshman said at the monthly monetary policy review forum at the Central Bank Head Office in Colombo.

The Governor said, given the current and expected developments in the domestic economy and the financial market, the CBSL Monetary Board recognized the necessity to continue with its accommodative monetary policy stance.

Accordingly, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank will remain at 4.50 percent and 5.50 percent, respectively.

“The Board recognized the necessity to continue the accommodative monetary policy stance, particularly as market lending rates are yet to reflect the full pass-through of policy easing measures implemented thus far, he said.

The CBSL Governor added – ‘The Board has decided to adopt targeted measures to reduce specific interest rates that it considered to be excessive, which would help marginal borrowers.

‘The Board anticipates a further reduction in overall market lending rates, thereby encouraging borrowing for productive economic activity and reinforcing support for COVID-19 hit businesses as well as the broader economy, given the conditions of subdued inflation.

“The Bank expects domestic economic activities, which were adversely affected by the COVID-19 pandemic, to recover in the second half of 2020.

‘However, the external sector continued to demonstrate resilience, reflecting the impact of prudent measures implemented amid the COVID-19 outbreak. The trade deficit has narrowed during the first half of 2020 and inflation is remaining at mid-single digits.

‘In spite of short term fluctuations, inflation is expected to remain broadly within the desired 4-6 per cent range in the near to medium term, with appropriate policy measures.

‘Growth of credit extended to the private sector by commercial banks decelerated in June 2020, for the second consecutive month. However, a gradual recovery in credit extended to the private sector is expected in the period ahead.

‘The Central Bank will continue to monitor domestic and global macroeconomic and financial market developments and take further measures to support the economy to return to a higher growth path without delay, given subdued levels of inflation.’

 

 

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CEAT Kelani boosts earnings of local rubber industry

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CEAT Kelani representatives conducting training for rubber suppliers.

Increased production to meet local demand has enabled CEAT Kelani Holdings to increase its monthly purchases of natural rubber in the domestic market by as much as 35 per cent by September, the country’s leading tyre manufacturer has disclosed.

The company, which sources all of its natural rubber requirements locally, said its purchases in September 2020 alone would reach 500 tonnes (500,000kgs), generating Rs 150 million in revenue for Sri Lankan producers in areas such as Kegalle, Kalutara, Ratnapura and Monaragala.

In the pre-pandemic months of December 2019 to February 2020, CEAT Kelani’s purchases of rubber averaged 366 tonnes a month, generating average monthly revenue of Rs 107 million for local suppliers, the Company said.

“One of the major reasons for CEAT Kelani’s existence in Sri Lanka is the availability of natural rubber, and we have always been focussed on maximising local value addition,” the company’s Managing Director Ravi Dadlani observed. “With our ramping up of production in response to the temporary import restrictions imposed by the government, our contribution to local natural rubber producers has increased sharply, by as much as 40 per cent in value terms in just seven months.”

Increased production of truck, bus, radial and two-wheeler tyres by CEAT, while supporting the government’s efforts to conserve foreign exchange through import substitution, would also help local industry achieve the ‘V’ shaped post-pandemic recovery that is expected of it, Dadlani said.

CEAT Kelani engages with a base of nearly 30 dealers for the purchase of natural RSS rubber and interacts with them on daily basis. Besides daily procurement transactions, the Company imparts knowhow to the dealers to help them improve the quality of RSS grades. “We periodically audit dealers’ operations and help them maintain high quality standards,” Mr Dadlani added. “As a result many of our dealers are now recognised as “CEAT approved NR dealers.” This recognition not only helps them to be consistent suppliers to CEAT Kelani, it also helps them to establish themselves as quality suppliers of RSS grades to rest of the local industry.”

CEAT’s ramping up of production of truck and bus tyres since the start of the pandemic-linked lockdown has resulted in the Company now producing 100 per cent of the segment’s requirements and enabled the government to make a saving of Rs 11 billion a year in foreign exchange. The Company has also achieved an 85 per cent increase in the production of tyres for the ‘two-wheeler’ segment over the past three months; enabling a further saving of Rs 350 million a year through import substitution.

CEAT Kelani can currently produce two million tyres annually across multiple categories, and an addition of a further 200,000 Car and Van Radial tyres is imminent with new machinery being installed, pending the arrival of foreign technologists to commission the additional capacity.

Notably, CEAT Kelani Holdings has kept the prices of its tyres unchanged since December 2019 to support customers and the economy, despite the additional investments made in increasing capacity and an increase in market prices due to demand.

CEAT Kelani Holdings is considered one of the most successful India – Sri Lanka joint ventures in the manufacturing sector. The joint venture’s cumulative investment in Sri Lanka to date totals Rs 8 billion, inclusive of Rs 3 billion committed in January 2018 for expansion of volumes, technology upgrades and new product development. The company’s manufacturing operations in Sri Lanka encompass pneumatic tyres in the radial (passenger cars, vans and SUVs), commercial (Bias-ply and radial), motorcycle, three-wheeler and agricultural vehicle segments.

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Dialog Axiata introduces ‘Couple Blaster’ with unlimited calls and SMS

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Dialog Axiata PLC announced the launch of Sri Lanka’s Best Couple Plan ‘Couple Blaster’ facilitating all Dialog mobile customers with Unlimited Calls and SMS between two numbers for as low as Rs. 123 (including taxes) per month. The unique feature of this plan is that only one user needs to activate it for both users to enjoy the benefit of unlimited calls and SMS.Dialog Mobile postpaid customers can activate the package and register the couple number by dialling #171#.  Dialog Mobile prepaid customers can activate the package by reloading Rs. 123 and register the couple number by dialling #171#. The couple number to be registered can either be a Dialog mobile prepaid or postpaid mobile connection. Mobile postpaid customers will have the freedom to change the couple number as and when they require for a fee of Rs. 100, for each change made. Prepaid mobile customers can change the other registered number free of charge, once every month.Understanding the emergent consumer needs, the ‘Couple Blaster’ package acts as an ultimate accompaniment to the Unlimited YouTube, Facebook and WhatsApp plans being offered by Dialog’s ‘Blaster’ range for all the digitally savvy youth who rely on relevant, accessible and affordable Voice, SMS and Data plans. This latest addition is testament to the company’s commitment to facilitate over 15 million of its customers.

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Sampath Bank supports medical research with special loan

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Nanda Fernando, Managing Director, Sampath Bank PLC (3rd from right) hands over the agreement to Dr. Nihal Abeysinghe, President-Elect, College of Community Physicians of Sri Lanka (CCPSL), where several other senior officials were present.

Extending its support to the field of medical research during this global pandemic proactively, Sampath Bank joined hands with the College of Community Physicians of Sri Lanka (CCPSL) to offer a special low interest loan to Postgraduate Medical Officers in Public Health.

The Bank is offering loans of up to Rs.1 million at a fixed rate of 8.5% p.a. for the first year and a floating rate of 9% p.a. for the remaining period of the loan, for up to 7 years, with a grace period of up to 12 months.

This loan is aimed at supporting Postgraduate Medical Officers with the costs associated in their research at the University of Colombo’s Post Graduate Institute of Medicine. They can obtain this facility without any personal guarantee by simply providing an undertaking from their employer to remit their salary or the loan instalment amount to the account.

Nanda Fernando, Managing Director, Sampath Bank PLC handed over the formal agreement in this regard to Dr. Nihal Abeysinghe, President-Elect, College of Community Physicians of Sri Lanka at the Sampath Bank Head Office premises in the presence of representatives from Sampath Bank and the CCPSL

“At Sampath Bank, we have always taken pride in recognising the intelligence, originality and inventiveness of our fellow Sri Lankans and are committed to powering the nation’s research and development efforts. Inspired by the passion and dedication of the countless heroes from across Sri Lanka’s healthcare sector, especially during this pandemic, we sought to extend our support to them. As part of this, we are delighted to support them with their research through a special loan for Medical Officers engaged in Postgraduate studies in Community Medicine at the Post Graduate Institute of Medicine, University of Colombo. We look forward to seeing more pioneering medical research coming from our country in the future,” said Nanda Fernando, Managing Director, Sampath Bank PLC.

“We are grateful to Sampath Bank for offering concessionary loans to Medical Officers pursuing in Postgraduate studies in Community Medicine at the Post Graduate Institute of Medicine, University of Colombo. Coming at a time when there is a heightened need for medical research and education, this will go a long way in helping them with their research. We look forward to seeing other disciplines in postgraduate medical studies availing similar benefits for their courses too,” said Dr. Nihal Abeysinghe, President-Elect, College of Community Physicians of Sri Lanka.

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