By Hiran H.Senewiratne
The government has decided to remove all restrictions imposed by it on the importation of non-essential goods, the Governor of the Central Bank Ajith Nivard Cabraal said.
“The cash deposit restrictions imposed by the Central Bank on the importation of non-essential goods will be removed and importers should take strict responsibility in importing goods after this concession is granted,” Governor Cabraal disclosed while speaking during an event to unveil the CBSL’s ‘Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability’. The event was held at the Atrium of the CBSL yesterday.
Cabraal said the Central Bank on September 8 decided to impose a 100 percent cash margin deposit requirement against the importation of selected goods of non-essential and non-urgent nature made under Letters of Credit and Documents against Acceptance Terms with Licensed Commercial Banks and the National Savings Bank, with immediate effect.
Presenting the road map for the next six months, the Governor said the government will aim to increase Gross Official Reserves to cover a minimum of 4 months of imports by March 2022.
The Central Bank balance sheet will be strengthened with gradual rollback measures and the buildup of external reserves, which now stand at US $ five billion, he said.
Among other objectives are to achieve a stable exchange rate, stable interest rates and Real GDP growth of around 5 percent in 2021 and 6.5 percent in 1Q-2022 and to stabilize inflation at mid-single digits.
Speaking on the Central Bank’s ‘to-do-list’ regarding macroeconomic stability concerns, Cabraal said that they will ensure the maintenance of mid-single digit inflation and ensure stability of interest rates and exchange rates.
He said the CBSL will continue with steps to curb prohibited pyramid schemes and other financial scams and also introduce directions on IT Risk Resilience of Licensed Banks.
Meanwhile, ‘Credit Counseling Centres’ and ‘Investment Advisory Centres’ are to be established at Regional Offices while the Central Bank will facilitate the setting up ‘Equity Funds’ to support stressed businesses and thereby avoid the increase of nonperforming loans (NPLs).
Cabraal further said that the cash margin deposit requirements on non-essential/non-urgent imports will be discontinued with immediate effect.
We will also consider the possibility of buying back the entire Issue of ISBs maturing in January 2022 and/or July 2022, if high discounts are prevalent in the market, he added.
‘Dollar reserves in SL plummet drastically, putting the economy in jeopardy‘
By Steve A. Morrell
Sri Lanka’s dollar reserves have declined from $ 7.15 billion in 2019 to $ 2.8 billion currently. The President conceded economic failures although reasons for such failure were not explained, chairman, National Chamber of Industries (CNCI) Canisius Fernando said.
Fernando added recently at a forum: “Forex reserves are insufficient to expedite payment of import bills. More so that cost incurred on container traffic for imports and or exports was on a rising spiral. In comparison to cost of container shipping recorded at $ 2,800 earlier, it is now $ 12,000, indicating a rise in multiples of 250.
“Additionally, the Generalized System of Preferences (GSP +) affecting our trade with EU countries, placed Sri Lanka’s reputation at a risk, meaning that countries could veer away from Sri Lanka prompted by a possible inability to honor our trade commitments. The clear example being trade with the US. Rather than await goods and services transactions with Sri Lanka, that could invariably take three months, US economists and their trade sector opted to transact trade with countries in close proximity to US shores.
“Dearth of container traffic and rising cost for on- loading and off- loading of cargo seriously affect trade imbalances. Consequently, the credit worthiness of the Sri Lankan economy is affected, which in turn seriously affects the GDP.
“Worker wages which were static because of trade shut- downs caused demands for increased wages. Wage demands of Rs 1,500 from employees became a major phenomenon in most sectors. The question at issue was the hypothetical position of business establishments of about 4000 employees demanding increased wages. This would cause closure of those companies resulting in unemployment.
“The proverbial domino effect of such repercussions would cause further chaos in the economy.
“There was no proper policy in most sectors. Suspension of the import of fertilizer and consequent confusion would, in the short run, result in famine and food shortages. Already this was evident in the public panic caused by having to stand in line to purchase essentials. That the crisis is upon us and the question of a quick solution is not feasible in the current context of the economy.
“Foreign investors are lured by the possibility of cheap labour in Sri Lanka to establish their businesses here, but in this instance too, this is only a hypothetical situation but not the reality.”
Supuni Products gives back by way of welfare initiative, helps to uplift the needy patients with chronic illnesses
Supuni Products first started in 2016 when the business proprietor, Supuni Lakmalie along with her husband only had Rs. 150 as investment. With that small amount, they purchased kollu (lentils) and kurakkan and ground them using a grindstone. This was the beginning for them and today, Supuni Products is a booming enterprise that specializes in ground spices and cereal, operating from the town of Nildandahinna, Walapane. Their products are of very high quality and 100% natural and consists of 15 different spice and cereal products including chilli, coriander, turmeric, pepper, curry powder, kurakkan, lentil (kollu) etc.
In 2018, Supuni Products received the opportunity to supply kurakkan flour and cereal to be included into the Poshana Malla, which is a nutrition package prepared for pregnant women, instigated by the government. The success of their business was such that they were able to gain an equity of over Rs. Four million during the past three years.
As part of a welfare initiative, they have also pledged to allocate one rupee for every kilogram of product sold, towards supporting patients with financial difficulties and require emergency surgery and for those with chronic diseases. While having had to run a business in the confines of their own home, the grant offering they received from the enterprise project allowed them to complete construction work of their new factory. She now hopes to expand the business, improve their supply chain, and create new employment opportunities.
Dialog Enterprise offers Dell Technologies Cloud IaaS in Sri Lanka
Dialog Enterprise, the corporate solutions arm of Dialog Axiata PLC, is working with Dell Technologies Cloud Solution Provider (CSP) in Sri Lanka to offer Dell Technologies Cloud Infrastructure-as-a-Service (IaaS) solutions to customers to innovate and scale rapidly, reduce costs and increase performance of business-critical infrastructure.
“Together, with our combined forces, we bring the only hybrid multi-cloud partnership in the country, giving access to private clouds as well as to our existing public cloud, and for on-premises infrastructure, robustly powered by Dell Technologies and VMWare. Envisioning a one-stop multiservice solution for all enterprise requirements, we strive continuously to keep to the changing landscape strengthening the cloud play in the arena,” said Navin Pieris, the Vice President – Enterprise Business and Large Enterprise Sales, Dialog Axiata PLC.
Rather than making capital investments in hardware, storage and servers to maintain them, enterprises can harness and scale IaaS resources when needed, paying only for infrastructure services they consume. Mitigating and allowing for any threat of data loss, the cloud partnership also offers cyber recovery as a service with a guaranteed uptime of 99.95%, end-to-end management of data centers and 24×7 support with zero operational burden on the customer. Ensuring the same standardization, self-service, automation and analytics capabilities that exist in the public cloud, the partnership facilitates secure private clouds for customers along with servers, storage and customized enterprise, private and/or public cloud solutions as required by enterprises.
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