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Moody’s downgrade ‘unwarranted, erroneous suggesting reckless reaction’

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Government wades into battle with facts, figures and projections

In an extraordinary hard-hitting rejoinder to Moody’s downgrade of their Sri Lanka rating from B2 to Caa1 with a stable outlook, the Ministry of Finance, State Ministry of Money, Capital Markets and Public Enterprise Reforms (headed by former Central Bank Governor Ajith Nivard Cabraal) and the Central Bank accused the well-known rating agency of an “unwarranted and erroneous” finding that suggests a “reckless reaction.”

It said that “instead of understanding the economic turnaround as well as awaiting the Budget that is due in November, the downgrade of SL at the beginning of the Economic Revival is inexplicable.”

“This hasty rating action seems similar to the previous premature and reckless downgrades by rating agencies in the immediate aftermath of the ending of the internal conflict in 2009 and during the political impasse at the end of 2018. In both instances, the rating actions were proven to be hasty and erroneous, and those actions only resulted in several investors suffering unnecessary loses and missing out on emerging opportunities.”

“Moody’s rating downgrade fails to recognize and do justice to the ground reality of the ongoing rapid economic recovery backed by vastly improved business confidence arising from the return of political stability and policy stability after a lapse of five years,” the presentation said.

It went on to stress that Sri Lanka, like many of its peers in the emerging market group, experienced initial capital outflows, exchange rate depreciation, showdown in activity and pressure on government finances in response to the effects of the Covid-19 pandemic.

“But, the swiftness with which decisions were taken followed by the landslide victory of the government, enabled Sri Lanka to move along a recovery path towards growth and stability,” it said.

Since May, merchandise exports had bounced back, and by July, had returned to pre-Covid monthly averages of USD one billion, the presentation supported by graphs and charts said.

It argued that SL recognized the probable external sector pressure early, and decisively curtailed non-essential imports in order to prioritize external debt service obligations. The cumulative trade deficit by end December is expected to be around only USD 5.8 billion, significantly down from USD eight billion the previous year.

“The savings on the import bill due to the curtailment of non-essential imports as well as significant reductions in the fuel import bill is expected to be over USD 2.0 billion,” the presentation said.

Discussing the vital tourism sector, it said that although inbound tourist movements are yet not possible given the global pandemic situation, other service exports, including IT services and shipping remain robust. It added that workers’ remittances have recorded a sharp increase in spite of the initial expectations of a slowdown and at current trends, “the cumulative decline in workers remittances is likely to be marginal, compared to previous expectations of a decline of 15%.”

On foreign direct investment, it admitted that FDI inflows had slowed, but the investment pipeline is strengthening. While FDI slowed in the first half of this year (from a peak of USD 2,000 billion in 2018), looking ahead prospects were promising particularly with expected inflows into 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,” the presentation said. “Other expected investments include import alternative industries as well as investments by international financial institutions.”

“FDI inflows during 2020 are expected to be over USD 750 million, which is only about USD 400 million less that in 2019. At the start of the pandemic, FDIs were expected to be only around USD 300 million for the year 2020.”

The presentation further said that stock market indices have improved dramatically to pre-Covid levels and are likely to gain further momentum. Also, foreign inflows to the government securities market have already showed signs of resumption and according to initial responses, are likely to increase in the coming months, particularly in the wake of the attractive SWAP arrangements offered by the SL authorities.

With increased emphasis on domestic agriculture, agro-based industries and resource-based industries, domestic economic activities have turned around remarkably and recorded V-shaped recoveries. A bumper Yala crop was expected to follow the bumper Maha. Industrial production has rebounded, electricity generation is normalizing with greater reliance on hydropower generation and the construction sector has gradually gathered pace.

The exchange rate had appreciated sharply since mid-April and remains stable at appreciated levels, allowing the Central Bank to accumulate reserves through market purchases of foreign exchange. Foreign inflows following the Moody’s downgrade enabled the Central Bank to purchase USD 30 million from the forex market on Sept. 29.

The presentation further said that the Debt to GDP ration which increased in recent years is expected to improve in the medium term; that envisaged financing inflows for 2020 favours domestic markets and strategic foreign financing; and that foreign Treasury bills and bonds holdings are likely to attract a substantial volume of investments in coming months.

Other positives outlined includes that official reserves of CBSL had increased to USD 7.4 bn. by end August 2020; a policy environment facilitating high economic growth beyond the recovery stage while preserving macro-economic stability and a “deep and unwavering commitment to our investors.”



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Navy renders assistance to bring injured fisherman ashore

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The Sri Lanka Navy demonstrated its commitment to maritime safety by  assisting  to bring ashore an injured fisherman and rushing him for urgent medical attention on Thursday (28 May 2026)

The fisherman was aboard a local multiday fishing trawler off the south coast and the Maritime Rescue Coordination Centre (MRCC) Colombo coordinated the retrieval of the fisherman.

Reportedly, the multi-day fishing trawler had departed from the Kudawella Fisheries  Harbour on 05th  May with 06 fishermen. While engaged in fishing activities approximately 730 nautical miles off the south coast, one of the crew members suffered an injury.

Following a formal request for assistance, through MRCC Colombo, the Merchant Vessel ‘Dong Fang Wei Ye’ sailing in the nearby sea area had been informed to retrieve the patient. In a rapid response, the Navy dispatched a craft attached to the Southern Naval Command to the designated sea area where the Merchant Vessel was stationed to transfer the fisherman.

Upon transferring the injured fisherman from the Merchant Vessel, naval personnel provided essential first aid to the injured person before swiftly bringing him to the Galle Harbour And safely transferred him to the National Hospital, Galle.

 

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Applications called to recruit 400 public officers as Digital Champions for the Public Impact Champions Network

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As a key component of the Government’s Digital Economy Plan aimed at enhancing the quality and efficiency of the public sector system, an awareness programme for coordinating executive officers of public institutions was held on Wednesday (27) at the Information and Communication Technology Agency of Sri Lanka (ICTA). The programme marked the first step towards establishing the “Public Impact Champions Network” (PIC-NET), an institutional pilot network intended to drive the optimisation of public services through the digitalisation of public institutions.

During the programme, heads of institutions were informed to submit applications from officers currently serving in public institutions who possess the capability and capacity to represent the “Champions Corps” in spearheading digital transformation, in accordance with Circular PS/ADA/Circular/3/2026.

Chairman of the Information and Communication Technology Agency of Sri Lanka and Senior Adviser to the President on the Digital Economy, Dr. Hans Wijayasuriya, stated that the Government aims to increase Sri Lanka’s digitally empowered economy from its current level of 3% to 12% by 2030.

He further explained that the development of the digital economy is a process aimed at improving efficiency, quality and revenue generation through the use of communication technology in economic activities.

Pointing out how the digital economy has expanded in every developed state, Dr Hans Wijayasuriya noted that the slow growth of the digital economy remains a serious challenge faced by Third World countries. However, he stated that India is currently achieving remarkable progress in digital economic development and that elevating Sri Lanka’s digital economy to a prominent level alongside such developments is one of the Government’s principal objectives.

Dr Hans Wijayasuriya also pointed out that this digital economic growth must take place simultaneously across nearly all public institutions. Accordingly, within the next three years, the coordination and management of transactions among public institutions are expected to function in a fully networked manner similar to banking operations.

He further emphasised that the support of both public institutions and the country’s citizens as a whole would be crucial for the successful implementation of this extensive technological transformation across all public institutions over the next few years.

Ranil Peiris of the Department of Information Technology at the University of Sri Jayewardenepura briefed those present on the foundation of the PIC-NET programme and its future plans.

He explained that, in the future, citizens would be able to access services such as applying for passports and renewing licences entirely online from their homes. He further pointed out that this system would eliminate the need for citizens to repeatedly provide the same information.

Representatives of KPMG also presented the future action plan relating to the selection and training of officers.

Representing the Presidential Secretariat, Sameera Wickremasinghe further briefed participants on the mechanism for calling applications.

The necessary guidance and coordination support for this public sector digitalisation programme are being provided with the support of the Presidential Secretariat, the Ministry of Digital Economy, GovTech Sri Lanka and the Asian Development Bank.

(PMD)

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Mother-in-law of Indian bride whose death set off media frenzy arrested

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Twisha Sharma was found dead in her marital home on 12 May [BBC]

India’s top anti-crime agency has arrested the mother-in-law of an Indian woman whose death has sparked conflicting claims of murder and suicide.

Twisha Sharma’s parents and siblings have alleged that she was tortured by her lawyer husband, Samarth Singh, and his mother – retired judge Giribala Singh – over dowry demands and that she was murdered, allegations they have denied.

The 33-year-old model and actor had been married for just five months when she was found dead in her matrimonial home in Madhya Pradesh state’s Bhopal city on 12 May.

On Thursday, the Central Bureau of Investigation (CBI) arrested Giribala Singh after questioning her for several hours.

The Madhya Pradesh High Court had earlier cancelled her anticipatory bail, finding that a trial court had ignored key evidence and witness testimony.

Following Twisha’s death, the police had registered a case of dowry death against the Singhs. Earlier this week, the investigation was taken over by the CBI.

Twisha’s death has made national headlines and has once against brought the issue of dowry deaths into the spotlight. Every year, thousands of women are murdered for bringing in insufficient dowries, even though the practice was banned in 1961.

The case has drawn significant attention because of the family’s prominence. Twisha was a former beauty pageant winner and actor, while her husband and mother-in-law were lawyers.

Twisha’s parents allege that dowry-related harassment began soon after her marriage to Singh. They also claim that when she became pregnant, Singh and his mother accused her of infidelity and forced her to terminate the pregnancy.

The Singhs deny the allegations, saying Twisha had mental health issues and took her own life. They also contend that the decision to terminate the pregnancy was hers.

Singh is currently in police custody. He had reportedly absconded after Twisha’s death and was arrested by police in Jabalpur on 22 May.

Twisha was cremated on Sunday after a second autopsy. Her family had alleged that the first post-mortem was flawed and accused the police of a cover-up, a charge the police denied.

[BBC]

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