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Foreign investors urged not to be dissuaded by Moody’s erroneous stance on Sri Lanka

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6 years ago

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In response to recent Moody’s ratings, the Central Bank of Sri Lanka issued the following statement.

We observe, with disappointment, the rating downgrade by Moody’s Investors Service and the recent release of an erroneous analysis by an international investment bank expressing concern s about Sri Lanka’s economic and financial strength and external debt service capacity.

This downgrade and the report failed to do justice to the ground reality of the ongoing rapid economic recovery backed by vastly improved business confidence arising from the return of political and policy stability after a lapse of five years. Such announcement is also unwarranted especially at a time when the new Government is about to announce its Budget for 2021, spelling out the policy framework proposed in the medium term.

While Sri Lanka too like many of its peers in the emerging market group, experienced initial capital outflows, exchange rate depreciation, slowdown in activity, and pressure on government finances, in response to the effects of COVID-19 pandemic, unlike many of its peers, the country has been able to decisively deal with the domestic spread of the pandemic, for which Sri Lanka is hailed as one of the few countries to have been able to do so. The swiftness with which decisions were taken followed. by the landslide vi story of the Government, Sri Lanka is now moving along a recovery path towards growth and stability.

Merchandise exports have returned to pre-COVID monthly avers ges of US dollars 1 billion. With the curtailment of non- essential imports, the trade deficit has improved notably. Although inbound tourist movements are not yet allowed, other services exports, including IT services and shipping, remain robust. Workers’ remittances have recorded a sharp increase in spite of the initial expectation of a slowdown. Amidst the COVID response the Government also initiated reforms in State Owned Enterprises (SOE) and the Impact of such actions can be seen already with some SOE’s showing positive results.

Foreign Direct Investments, which slowed in the first half of the year, appear promising looking ahead, particularly with the expected inflows to the Port City project and for new manufacturing projects. The expected finalization of new legislation for the Port City within a month will result in the realization of investment by those who have already completed due diligence on such investment. Other expected investments include import alternative industries as well as investments by international financial institutions. With regard to portfolio flows, foreign inflows to the government securities market have already shown signs of resumption. The stock market indices have improved to pre-COVJD levels.

The tourism sector has been supported by the flourishing domestic tourism. With increased emphasis on domestic agriculture, agro-based industries and resource-based industries, domestic economic activity has seen a remarkable turnaround with more opportunities being created for entrepreneurs to flourish, and available economic indicators point towards a promis ing recovery in the second half of the year, following the setback in the first half.

Given these developments, the exchange rate has sharply appreciated since mid-April, and remains stable at appreciated levels allowing the Central Bank to accumulate reserves through market purchases of foreign exchange. In fact, official reserves of the Central Bank increased to US dollars 7.4 billion by end August 2020, and the Government has repeatedly expressed its ability and willingness to meet all its debt obligations falling due in the period ahead. The recently introduced measures to entice foreign investors to the government securities market and the real economy through an attractive foreign exchange swap arrangement are likely to help enhance foreign currency inflows, in addition to the support of friendly countries, such as the swap arrangement with the Reserve Bank of India in July 2020 and the expected disbursement of the 21 1<1 tr anche of the Foreign Currency Term Financing Facility proceeds from the China Development Bank in October 2020.

Sri Lanka’s policy environment remains facilitative of enabling high economic growth beyond the recovery phase while preserving macroeconomic stability. On the back of over 11 years of well anchored mid-single dig it levels of inflation, the Central Bank has pursued an increasingly accommodative monetary policy stance. Fiscal policy, while remaining focused on supporting the economy, will return to a path of consolidation as envisaged in the Government’s policy framework, “Vistas of Prosperity and Splend our”. Hence, both fiscal and monetary policies have prioritized supporting people, businesses and thereby the economy, without jeopardizing the ma croeconomic balance of the country.

Given these circumstances, the Government of Sri Lanka wishes to reaffirm to foreign investors that ha ve put faith in Sri Lanka continuously over the past several years that Sri Lanka remains willing and able to meet its debt obligations, as it has done impeccably in the past. In fact, Sri Lanka is one of the few countries to have recognized the external sector pressures and decisively curtailed all non- essential imports with a view to prioritize external debt service obligations.

Furthermore, the press release added that all payment transactions for the repayment of the International Sovereign Bond of US dollars 1 billion maturing on 04 October 2020 have already been lined up and funds will be credited to the paying agent’s account on 02 October 2020. It is puzzling that Moody’s has downgraded Sri Lanka on the eve of this repayment, which seems similar to the previous premature and reckless downgrades by rating agencies in the immediate aftermath of the en d of the internal conflict in 2009 and during the political impasse at end 2018.

Accordingly, foreign investors are invited not to be dissuaded by the recent unwarranted rating downgrade and the erroneous analysis published recklessly, but to be guided by improving economic conditions as outlined above. As in the past, any investor can approach the Ministry of Finance, the State Ministry of Money and Capital Market and State Enterprise Reforms, and the Central Bank of Sri Lanka, and the highest level officials of these entities remain committed to facilitate any one-on-one or roadshow d is cussions with investors.

In addition, the Government will commence regular roadshows to strengthen investor relations following the announcement of the National Budget in November 2020, which will provide further clarity on the Government’s medium term fiscal and financing plans.


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Trade, Investment and Tourism Cooperation Forum strengthens economic ties between Sri Lanka and Vietnam

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11 hours ago

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2026/05/9

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Marking a significant milestone in strengthening bilateral relations between Sri Lanka and Vietnam, the Sri Lanka– Vietnam Trade, Investment and Tourism Cooperation Forum was successfully held on Friday (08) at the Hilton Colombo.

The Forum, jointly organised by the Vietnam Chamber of Commerce and Industry and the Sri Lanka Export Development Board, was held in parallel with the State Visit of President Tô Lâm of the Socialist Republic of Vietnam and General Secretary of the Central Committee of the Communist Party of Vietnam. The event was attended by President Tô Lâm and Prime Minister Dr. Harini Amarasuriya.

The Forum underscored the importance of the longstanding bilateral relationship between the two countries and reflected the shared commitment to expanding economic cooperation.

The primary objective of the Forum was to further strengthen bilateral economic ties by focusing on key priorities including the expansion of trade, promotion of investment and enhancement of tourism cooperation. The event also provided an opportunity to explore new avenues of collaboration, strengthen business-to-business engagement and facilitate greater market access by bringing together senior government officials, entrepreneurs and industry leaders from both countries on a common platform.

During the Forum, direct air connectivity between Colombo and Ho Chi Minh City was officially launched. The new services, operated by Vietnam Airlines and VietJet Air, are expected to further strengthen relations between the two nations and their people.

Six Memoranda of Understanding covering key areas of cooperation were also signed during the Forum. In addition, a notable development was the establishment of the Sri Lanka–Vietnam Business Council under the Ceylon Chamber of Commerce.

Alongside the Forum, the Sri Lanka Export Development Board organised a business networking session, providing Sri Lankan and Vietnamese entrepreneurs with the opportunity to engage directly with one another. The event received strong participation from the private sectors of both countries, with businesses expressing keen interest in expanding trade and establishing resilient supply chains.

Representing Sri Lanka at the event were Minister of Industry and Entrepreneurship Development, Sunil Handunnetti, Minister of Environment , Dr. Dhammika Patabendi, Deputy Minister of Industry and Entrepreneurship Development ,Chathuranga Abeysinghe, Deputy Minister of Ports and Civil Aviation, Janitha Ruwan Kodithuwakku, Deputy Minister of Tourism Ruwan Ranasinghe, Secretary to the Ministry of Industry and Entrepreneurship Development, Thilaka Jayasundara, Secretary to the Ministry of Trade, Commerce, Food Security and Cooperative Development, K.A.Vimalenthirarajah, Chairman of the Export Development Board Mangala Wijesinghe along with several other dignitaries and officials.

Representing Vietnam were Politburo Member, Secretary of the Party Central Committee and Chairman of the Central Organisation Commission , Nguyen Duy Ngoc, Politburo Member, Secretary of the Party Central Committee and Chairman of the Central Commission for Policies and Strategies , Nguyen Thanh Nghi, Politburo Member, Deputy Prime Minister and Minister of National Defence, Phan Van Giang, Politburo Member and Minister of Public Security, Luong Tam Quang and Politburo Member and Minister of Foreign Affairs, Le Hoai Trung, among others.

(PMD)

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SL to launch first Dedicated Sustainable Tourism Association in South Asia

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14 hours ago

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2026/05/9

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Tourism personnel at the press briefing

‘Sri Lanka embarks on a journey towards a more sustainable and prosperous tourism industry.’

The Executive Committee of the Sustainable Tourism Association of Sri Lanka (SusTour) announced the above at its final meeting held on May 6, at Connaisance head office, Colombo. The committee finalised all preparations for the official launch in August of the first private sector led, non-governmental Sustainable Tourism Association in South Asia, as most tourism associations in Asia operate as dedicated Eco Tourism entities while this is probably the first in Asia.

This momentous event will be officiated by Prof. Ruwan Ranasinghe, the Deputy Minister of Tourism, who has agreed to inaugurate the Association in conjunction with a media launch.

Prof. Ranasinghe is not only a qualified academic specializing in sustainable tourism but also a passionate advocate for the development of sustainable tourism practices in Sri Lanka. His involvement is pivotal, as he has expressed his commitment to provide unwavering support to the Sustainable Tourism Association of Sri Lanka.

In addition to Prof. Ranasinghe’s support, Buddhika Hewawasam, chairman, SLTDA and Dheera Hettiarchchi, chairman, Sri Lanka Institute of Tourism and Hospitality Management, have also pledged their cooperation in the implementation of sustainable tourism initiatives through their respective state organisations. Their combined expertise and resources are expected to play a crucial role in shaping the future of tourism in Sri Lanka, ensuring that it aligns with sustainable development goals.

This inauguration marks a significant step towards fostering a sustainable tourism framework in Sri Lanka, one that prioritizes environmental preservation, cultural heritage and economic viability. The Sustainable Tourism Association of Sri Lanka is poised to lead the charge in promoting responsible tourism practices, ensuring that the industry flourishes while respecting the rich natural and cultural resources of the island.

Speaking at an exclusive press interview the Tourism Deputy Minister noted; “I am thrilled to see the private sector actively participating in the promotion of sustainable development, particularly within the tourism industry. This partnership is not just beneficial but essential, as it represents a viable mission that requires the joint engagement of both government and private entities. By working together, we can ensure that our tourism practices not only enhance economic growth but also preserve our natural resources and cultural heritage for future generations. It is through this collaborative approach that we can create lasting change and fulfill our commitment to sustainability.”

Adding to this collaborative effort, Australian High Commissioner Matthew Duckworth said Australia would continue its long-term support for sustainable tourism development in Sri Lanka. Australia has contributed more than 50 million Australian dollars over the past decade to sustainable tourism initiatives in Sri Lanka, including to support more sustainable planning, accreditation and skills development for this crucial sector. The High Commissioner confirmed that this support would continue into the future and highlighted Australia’s partnership with the Market Development Facility (MDF), which had recently launched a new initiative using data analytics to help Sri Lankan policy makers better understand how travelers discover and engage with destinations.

“Our vision is to create a platform where all stakeholders including product manufacturers can collaborate and share best practices in sustainable tourism, said Chandra Wickramasinghe, elected founder president of the Association. “We aim to ensure that tourism in Sri Lanka not only provides economic benefits but also contributes positively to the environment and local communities, he added.

The founders of STASL-SusTour believe that sustainable tourism is the ‘Future of World Tourism’ and is crucial for the long-term viability of Sri Lanka’s tourism sector, which is a significant contributor to the nation’s economy. By fostering responsible travel practices, the association seeks to educate stakeholders, including tourists and businesses along with manufacturers about the importance of sustainability.

‘ The association plans to launch various initiatives, including workshops, awareness campaigns and partnerships with local and international organizations focused on sustainable tourism, said Nalin Malwenna, newly elected secretary. Through these efforts, SusTour hopes to position Sri Lanka as a leading destination for eco-conscious travelers looking for authentic and responsible travel experiences.

“The establishment of the Sustainable Tourism Association of Sri Lanka arrives at a pivotal moment, signaling a commitment to a more sustainable future in the nation’s tourism landscape, said elected treasurer Dr. Samantha Pathirathne.

By Claude Gunasekera

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Siyapatha Finance unveils 62nd branch in dynamic Horana City

Published

14 hours ago

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2026/05/9

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Premier finance company Siyapatha Finance PLC recently unveiled its newest branch in Horana, successfully expanding its islandwide branch network to 62 branches. Located in one of the fastest-emerging economic hotspots in the Kalutara District, the Horana branch offers Siyapatha Finance’s wide range of holistic financial services including leasing, fixed deposits, gold financing, business loans,fast draft, factoring, and Smart Pay – the Company’s bill payment facility.

The branch was declared open by Siyapatha Finance PLC Directors- Jayanath Gunawardena and Ms. Sriyani Ranathunga , Chief Executive Officer (CEO) Mathisha Hewavitharana in the presence of Chief Operating Officer (COO) Rajeev De Silva, Ms. Dinuli Gihansi Perera -student of Govinna Maha Vidyalaya , Horana who has been selected to represent Sri Lanka for Asian Boxing Championship 2026 , Senior Management, staff members as well as Police HQI Ranga Perera , Grama Niladhari Mr. Chaminda Kumara, representatives of the government and private banks and insurance companies and well-wishers.

Speaking at the ceremony, Siyapatha Finance PLC CEO Mathisha Hewavitharana remarked: “Horana is a region that has captured massive interest nationally in terms of commercial and social development in recent years. Expanding our branch network to this area gives us a significant opportunity to broaden our reach and serve a larger, diverse ;;customer base’’.

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