Business
Money supply on a decelerating path
Remains to be seen whether current pace is enough to contain higher prices
According to an analysis by First Capital Research (FCR) into the monthly change in the money supply in the economy, in the three months since August policy rate hike, the monthly growth has in fact fallen into the negative territory in September and November while the annual growth rate has also ebbed quite notably.
Thus , the growth in the money supply in the economy has eased in recent months in a sign that the August pivot to monetary tightening has caused some pullback on the fast pace at which the money supply grew since the onset of the pandemic.
However, it remains to be seen whether the current pace is enough or more needs to be done to contain the higher prices, which have engulfed the entire economy, as there is a substantial element of inflation coming from the supply side constraints than the demand side pressures.
There is also no guarantee that the pace of growth in money supply will continue on the current decelerating path given the massive fiscal handouts offered by the government without careful thought or analysis.
According to data, the money supply measured by Broad Money (M2b), which has currency in circulation, demand deposits in the commercial banks and the domestic and offshore banking assets with the commercial banks, has risen by 15.4 percent in the year though November 2021, decelerating from 17.3 percent in the year through October.
In November 2020, the broad money was growing at a high of 22.3 percent as the Central Bank slashed rates to record lows and unleashed liquidity at an unprecedented level since the beginning of the pandemic to resuscitate the economy beset by the virus related restrictions.
But as the excesses emerged in areas of foreign exchange and prices towards mid last year, the Central Bank raised its key policy rates by 50 basis points on August 19 to signal the markets that it was ending the pandemic era policy support.
This substantially decelerated the pace of private sector credit growth and created a massive liquidity shortage in the overnight money market, which as of last week stood at Rs.460 billion.
The Central Bank funds the shortage through its Standing Lending Facility at 6.00 percent and such overnight liquidity injections amounted to a massive Rs.514 billion on January 13. Economists point out that the rising liquidity injections are a sign of money going out of the country by way of forex payments.
At the first monetary policy announcement for the year, the Central Bank further increased the policy rates by 50 basis points last week.
AIA Sri Lanka’s ‘Pawfect Match’ campaign, in partnership with animal welfare groups, inspired 500+ adoptions of stray pets. The initiative highlighted adoption, responsible ownership, and compassion, tackling Sri Lanka’s stray animal crisis. AIA thanks all supporters for their life-changing impact.
The campaign served as a reminder that even small acts of kindness like adopting a stray can make a big impact. It also provided an opportunity for the public to learn more about responsible pet ownership, animal rights, and the importance of compassion toward all creatures.
Calton Sweet House Pvt. Ltd., a key part of Calton Group, was honored as the Best National Industry Brand in the Medium-Scale Food and Beverage Sector at the National Industry Brand Excellence Awards 2024, organized by the Industrial Development Board. Deshamanya Mahesh De Silva, Director of Finance and IT at Calton Group, accepted the award.
Established in 1991, Calton Sweet House has over 30 years of excellence, specializing in cakes, snacks, and frozen bakery items, with 20+ outlets across Negombo, Katunayake, and Colombo, including at Bandaranaike International Airport. The company holds ISO, HACCP, and GMP certifications, ensuring top-quality standards.
Starting as a small store in 1983, Calton Group now employs 300+ staff and operates multiple businesses, including Calton Hyper Market and Calton Catering, while partnering with global brands like Unilever and Upfield. The group remains committed to serving customers with high-quality, safely packaged food products.
Total investments now exceed $3.37B, maintaining lead as top foreign investor
Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider and a member of the Dialog Axiata Group – the country’s largest Foreign Direct Investor (FDI) operating under the guidance of the Board of Investment of Sri Lanka (BOI) – announced a USD 100 million investment to further strengthen Sri Lanka’s digital infrastructure. With cumulative investments now exceeding USD 3.37 billion, Dialog reaffirms its commitment to inclusive connectivity, superior service delivery, and advancing the nation’s digital future.
The investment comprises USD 81 million by Dialog Axiata PLC (DAP) and USD 19 million by Dialog Broadband Networks (Private) Limited (DBN), formalised through two Supplementary Agreements with the BOI. These funds will be channelled into enhancing Dialog’s mobile and fixed telecommunications networks, accelerating the adoption of next-generation technologies, and expanding digital platforms that underpin the country’s connectivity and service ecosystem.
The Supplementary Agreement for DAP was signed by David Lau, Chairman, Dialog Axiata PLC, and Supun Weerasinghe, Director/Group Chief Executive, Dialog Axiata PLC, while the Agreement for DBN was signed by Supun Weerasinghe and Viranthi Attygalle, Group Company Secretary, Dialog Axiata PLC. Arjuna Herath, Chairman of the Board of Investment of Sri Lanka, signed both agreements on behalf of the BOI. Also present at the signing were Renuka Weerakone, Director General, Board of Investment of Sri Lanka, and Vivek Sood, Group Chief Executive Officer and Managing Director, Axiata Group Berhad.
“This investment is a reaffirmation of Axiata’s deep-rooted confidence in Sri Lanka’s future,” said Mr. Vivek Sood, Group Chief Executive Officer and Managing Director, Axiata Group Berhad. “We are proud to continue enabling our operating companies to deliver world-class connectivity and look forward to allocation of commercial 5G spectrum to accelerate Sri Lanka’s digital economy.”
“Dialog’s long-standing presence in Sri Lanka reflects our unwavering commitment to building infrastructure that not only supports economic growth but also enhances the lives of millions,” said David Lau, Chairman, Dialog Axiata PLC. “This investment will ensure Dialog continues to play a leading role in shaping the country’s digital future.”
“We will continue investing in Sri Lanka’s digital journey, empowering individuals, enterprises, and communities through next-generation connectivity,” said Supun Weerasinghe, Director/Group Chief Executive, Dialog Axiata PLC. “This latest commitment strengthens our resolve to deliver inclusive, future-ready infrastructure that supports national progress and positions Sri Lanka for a connected tomorrow.”
AIA Sri Lanka ‘Pawfect Match’ campaign
Calton wins National Industry Brand Excellence award
Dialog pumps another $100M into Sri Lanka’s digital growth
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