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GL follows up Udaya’s initiative, negotiates concessionary crude oil supplies with UAE

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Balance-of-payment crisis continues to stagger govt.

By Shamindra Ferdinando

The United Arab Emirates (UAD) has agreed to discuss a possible arrangement to provide Sri Lanka crude oil on concessionary terms in the face of the country experiencing a severe balance-of-payments crisis, according to the Foreign Ministry.

Foreign Minister Prof. G.L. Peiris took up the matter with UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber, on the sidelines of the 76th session of the United Nations General Assembly (UNGA) in New York. Prof. Peiris is on President Gotabaya Rajapaksa’s delegation to the UNGA.

In late August, Energy Minister Udaya Gammanpila sought the intervention of the Acting Head of the UAE Embassy in Sri Lanka, Saif Alanofy. Minister Gammanpila also met the Iranian Ambassador in Colombo in a bid to explore the possibility of obtaining oil from Iran on concessionary arrangements.

The Foreign Ministry statement on Prof. Peiris meeting with the UAE Minister dealt with the financial crisis experienced by the country. “Foreign Minister Peiris explained the challenges Sri Lanka is experiencing in respect of its external budget, as a result of the COVID-19 pandemic. Prof. Peiris focused in particular on the country’s requirement for oil and requested concessionary arrangements from the UAE.”

The Foreign Ministry quoted Minister Al Jaber as having said that the UAE would be happy to assist and proposed the establishment of a strategic framework to take the process forward.”

The ministry stressed that both sides agreed to follow-up rapidly.

Energy Minister Udaya Gammanpila earlier told The Island that concessionary arrangements were required to procure oil as part of an overall strategy to overcome the developing crisis.

Pivithuru Hela Urumaya (PHU) leader and Attorney-at-law Gammanpila said that increase in fuel prices in the second week of June this year was only a part of the government’s response to heavy pressure on foreign reserves. Minister Gammanpila said that the decision was taken close on the heels of dire warning from the Central Bank.

Minister Gammanpila said that in spite of foreign currency crisis, the government ensured an uninterrupted supply of fuel. According to him, Sri Lanka spent as much as USD 3.5 to 5 bn annually on oil imports depending on the world market prices.



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Central Bank looking at proposal to permit dollar-paid vehicle imports

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Duty too must be paid in hard currency

The central bank is looking at a proposal to allow persons who can pay in foreign exchange to import vehicles and pay taxes in hard currency, Central Bank Governor Nivard Cabraal said last week.

He said that this was a proposal made by certain parties whom he did not identify making clear it was at a proposal stage with no decision taken. But it was under examination.

Asked whether Non-Resident Foreign Currency (NRFC) account holders – now called Personal Foreign Currency Accounts – would be permitted to use their resources to import a vehicle provided they would pay the applicable duty in hard currency, he said that he did not see why not.

“If the vehicle is paid for in hard currency and not converted rupees, and the duty also accrues to the government in hard currency, I don’t see any harm, in fact it would be good,” he said.

It would also mean that there’s are new vehicles coming into the country not paid for by rupees converted into hard currency plus a hard currency duty stream, an analyst said.

Banning vehicle imports on account of the present foreign exchange crunch has cost the government an immense revenue stream.

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Forex pressure eases – CB

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By Shyam Nuwan Ganewatte

The Central Bank says that pressure caused by shortage of foreign exchange is easing gradually towards better.

“Earnings from exports marked a notable improvement and recorded over US dollars 1 billion for the third consecutive month in August 2021. Expenditure on imports has also increased, partly reflecting the surge in global commodity prices, resulting in an expansion in the trade deficit during the eight months ending August 2021, over the corresponding period of last year. Outlook for tourism improved with the easing of travel restrictions globally and the successful vaccination drive domestically. Despite the moderation of workers’ remittances observed in recent months, a rebound is expected in the period ahead with the improved growth outlook for major foreign employment source countries and greater stability in the domestic foreign exchange market. The realisation of foreign investments in the real sector and the timely adoption of remedial measures by the Central Bank as enunciated in ‘The Six-month Road Map for Ensuring Macroeconomic and Financial System Stability’ are gradually easing pressures in the domestic foreign exchange market,” the Central Bank says.

The CBSL said that it continued to intervene in the foreign exchange market to provide liquidity for essential imports, including fuel. The depreciation of the Sri Lankan rupee against the US dollar is recorded at 6.8 per cent thus far in 2021.

It said that the gross official reserves were estimated at US dollars 2.6 billion by end September 2021. This, however, does not include the bilateral currency swap facility with the People’s Bank of China (PBoC) of CNY 10 billion (equivalent to approximately US dollars 1.5 billion). Gross official reserves are expected to improve with the measures that are being pursued by the Government and the Central Bank to attract fresh foreign exchange inflows, as outlined in the Six-month Road Map, thereby reinforcing the stability of the external sector in the period ahead.

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Samarasinha to promote ‘Commercial Diplomacy” among German states

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Nihal S. Samarasinha has been appointed as Honorary Consul of Sri Lanka for three Federal States in Germany, which includes Hessen, Rheinland Palatinate and Saarland.

He would be mainly promoting commecial diplomacy in the three states.

He presented his credentials to State Minister Axel Wintermeyer along with 18 other Consuls General and Honorary Consuls at the official State Residence Villa of the Minister President of Hessen.

Samarasinha, born in Sri Lanka and migrated to Germany in 1972 is the Chairman and Managing Director of Millennium Hospitality Advisory Company providing advisory services and managing and operating hotels of several international hotel brands based in Frankfurt am Main. He is an alumni of St. Joseph’s College, Colombo, and graduated from the Heidelberg Hotel School, Germany, American Hotel and Motel Association, Michigan USA; Holiday Inn University, Atlanta USA and from the Ramada International University, New York.

His focus in Finance throughout his career made him a proven financial expert with vast analytical skills.

 Samarasinha has held senior management positions in organisations such as Holiday Inn WorldWide (Europe) as Director of Finance; Canadian Pacific Hotels – Europe, Middle East, Africa (EMEA) as Regional Comptroller and Ramada International Hotels and Resorts as Vice-President of Finance and Internal Audit for Europe, Middle East and Africa (EMEA), India and Sri Lanka. He has been engaged in the hospitality industry since 1972 with remarkable success.

Over the years Samarasinha has developed strong bonds with Sri Lankans in all parts of Germany and had assisted them in numerous ways long before he was first appointed Honorary Consul for the Federal state of Rheinland Palatinate in 2010.

He is a co-founder of the Diplomatic Council in Frankfurt along with the former Sri Lanka’s Consul General in Frankfurt Buddhi Athauda, The Diplomatic Council acted as a springboard to promote Sri Lanka Tourism, Trade and Culture in an environment of commercial diplomacy.

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