First Capital Research believes that the Central Bank of Sri Lanka (CBSL) will maintain same policy stance in its monetary policy review, but given the concerns around economic growth, the research arm also supposes that there is a probability – to a lesser extent – that CBSL is likely to further ease its policy rates.
” The CBSL either can choose to hold policy rates steady or cut by a 25bps or 50bps while, hike is off the table due to the lackluster economic growth. We believe that there is a 60% probability to hold rates due to the considerable improvement in high frequency indicators and with fiscal and monetary measures implemented so far. However, there is a 20% probability each for 25bps and 50bps rate cut to support economic growth,” First Capital Research said in its latest report.
At the previous policy meeting held on November 2020, CBSL maintained its monetary policy stance, emphasizing the fact that overall market lending rates have witnessed a reduction during 2020 and there is a need for a continued downward adjustment in lending rates to boost economic growth. Moreover, introduction of maximum interest rates on mortgage- backed housing loans is expected to provide additional stimulus to the economy.
The next CBSL’s monetary policy review is scheduled to be announced on 19th January 2021 at 07.30 am.
The research arm further stated that excess liquidity prevailing in the domestic market requires no change in current policy stance.
“As a response to the measures taken by the Government, market liquidity increased to an elevated level while recording a three-year high on 1 January 2021 amounting to Rs. 266.5 billion. Accordingly, this excess liquidity in the system is expected to retain market interest rates at single digit levels while inducing further credit expansion. This inquires the need of further policy easing at the upcoming review,” it said.
It further stated that there is gradual rebound in private credit to power economic growth.
“Private sector credit increased by LKR 41.0Bn in Nov 2020 recording a growth for the fourth consecutive month indicating a revival in gross loan disbursements up to pre-pandemic levels in Dec 2019. The continuous uptrend in private sector credit till Nov 2020 reflects that both businesses and individuals are accelerating their economic activities to make up for the lost opportunities during lockdowns in the first wave of COVID, which could power decent growth in 4Q2020 and onwards,”
In response to previous monetary easing measures implemented by CBSL, (including the lending caps) to bring down costs of borrowing of businesses and households, both market deposit and lending rates adjusted notably so far during 2020.
First Capital Research believes these measures will enable to maintain market interest rates at stable levels in 2021 while playing its aiding role amidst the pandemic driven economic contraction.
Meanwhile, the research arm estimates that Sri Lanka’s GDP would see its steepest contraction in history of -5.8% in 2020 and to see a gradual recovery of 2.8% in 2021.
“The current government’s key drive is the development oriented economic growth which was spelled out through the Budget 2021 and is in the process of changing gears of the economy from a “recovery phase to an expansion phase. Accordingly, Government plans to reach 6% and above GDP growth during the next 5 years commencing from 2021. As we believe a development oriented budget coupled with low interest rate environment can support the Govt.’s medium-term goals. Therefore, the need to accelerate the GDP growth can be considered as a major factor favouring further policy easing at the upcoming review,” it said.
“Government is more focused on domestic funding to finance the budget deficit. This is reflected by the improved domestic to foreign debt ratio to 55:45 by end Sep 2020 from the previous 51:49 as at end of 2019. In the midst of limited access to the international financial markets, Government opt to rely more on domestic borrowings to finance the budget deficit and hence easing rates at the upcoming policy meeting results in reduced funding cost favouring the government,” it added.
MN Group becomes the Best Business of the Year at Pinnacals Awards
The MN Group won the Best Business of the Year Award at the Pinnacals Sri Lanka award ceremony at the Waters Edge Hotel, Battaramulla. Managing Director of MN Group of Companies (www.mngroup.lk), Roshan Wewage accepted the award on behalf of the organization. MN Group of Companies has previously won many awards including Lanka Business Awards (LBA) and Shramabimani.
Customers can obtain any construction related service from MN Group at a reasonable price. The company is also willing to finish half completed houses and commercial buildings at agreeable terms. MN Group understands that the tough economic circumstances have placed great pressure on the people and the company is committed to understanding their needs and to provide a warm and professional service. Roshan Wewage invited those who need to renovate their buildings to reach out to them.
Dilmah Adjudged Best Corporate Citizen for the Third Consecutive Year
Dilmah was awarded ‘Best Corporate Citizen Sustainability’ in the category of Businesses with Less than Rs. 15 Billion Annual Turnover, for the third consecutive year at the Best Corporate Citizen Sustainability (BCCS) Awards organized by the Ceylon Chamber of Commerce; recognizing that Dilmah has successfully achieved a sustainable balance between social, environmental, and economic performanc, a company news release said.
Evaluated by an independent & expert panel of judges, the awards are Sri Lanka’s most prestigious, scrutinizing and recognizing ethical and sustainable businesses. Dilmah was honoured as one of ten ‘Best Corporate Citizens’ of Sri Lanka, won the Award in the Environment Beyond Business Category, and was lauded for continuous commitment to the environment surpassing the realms of business.
“The annual BCCS Awards is the premier corporate citizenship award, highlights sustainability champions in the national corporate arena. The awards promote corporate citizen sustainability ownership and initiatives that deliver social and environmental benefits while pursuing profits. This recognition validates Dilmah’s emphasis on delivering social and environmental impact by sharing earnings through the work of the MJF Charitable Foundation and Dilmah Conservation,” the release said.
“In 1988, Merrill J. Fernando founded Dilmah, a family business, to serve humanity with kindness to people and nature, while sharing his passion for taste and goodness in tea. Over the years Dilmah has delivered over Rs. 7 billion for humanitarian benefit through the work of its charitable arm MJF Foundation and environmental arm Dilmah Conservation.
“Ensuring economic, social, and environmental sustainability exists at the heart of its operations and is integrated to every operational aspect of the business, Dilmah’s purpose is further extended through the work of the Merrill J. Fernando Charitable Foundation (MJF Foundation) and Dilmah Conservation (DC) by driving life-impacting initiatives.
“The MJF Foundation works directly with estate workers and underprivileged communities to uplift lives and empower them to pay-it-forward to their communities. Some of its core initiatives are the countrywide MJF centres, small-medium enterprises with over 2,000 small entrepreneurs, ‘Empower’ Culinary & Hospitality School, and ‘disABILITY’ teletherapy app.
“The sustainable development of people goes hand-in-hand with the planet. Dilmah Tea is a carbon neutral product manufactured at a carbon neutral facility. Further, Dilmah has pledged to achieve zero-emissions for its manufacturing process by 2030 through science-based targets. Dilmah Conservation functions under three main categories: environmental sustainability, biodiversity conservation, and education and awareness. As such, Dilmah Conservation initiatives range from butterfly to elephant conservation, climate research, adaptation and mitigation, rewilding tea gardens, conserving mangrove forests, and promoting nature-based entrepreneurship through seaweed cultivation and empowering agro-entrepreneurs.”
Winning the Best Corporate Citizen Sustainability Award 2022 is considered a top honour in the Sri Lankan corporate field. Each year, submissions are evaluated by an eminent panel of local experts, thought leaders, and academics. Dilmah considers receiving the Best Corporate Citizen Sustainability Award 2022 an important milestone in its journey as a truly sustainable brand with a purpose beyond profit.
Across the shores, Dilmah has been recognized for its attempt to take Ayurvedic wellness and goodness to the world with the help of tea. The Arana Range of Herbal Infusion Teas was voted the Product of the Year 2022 in Australia. Meanwhile, Dilmah on its 7th Consecutive Year was awarded Most Trusted Brand in New Zealand in 2022.
DSI Tyres bags two awards at SLIM Brand Excellence 2022
Sri Lanka’s premium tyre brand, DSI Tyres won two prestigious awards at the SLIM Brand Excellence Awards 2022, held recently in Colombo. DSI Tyres, who has already made a mark in the international markets too, won the Silver Award under the Product Brand of the Year category and the Bronze Award under the Local Brand of the Year category. These mark another important milestone in the company’s journey spanning three decades. DSI Tyres has also remained within the top three brands in Sri Lanka for three consecutive years, a significant achievement in a very competitive arena.
DSI Tyres’ role as a leading local tyre manufacturing company that continues to promote its brand in an eco-friendly manner through the use of state-of-the-art technology and continuous research and development which enables them to identify customer needs in a timely manner is the key reason behind its continuous achievements. DSI Tyres has been able to place its products optimally among the local and international customers using the latest marketing strategies. The company also places great emphasis on sustainability and has been able to expand its local and international market share maintaining continuous customer loyalty even at the most difficult periods. DSI tyres are becoming increasingly popular in the online sphere as well, due to the facilitation of online orders at the convenience of customers as well as the use of attractive digital marketing. “DSI Tyres has a special place in the people’s hearts.
We have won the people’s trust and it is the highest award we can receive. It is a great privilege for us to receive these awards, which a mark of appreciation for the work we do to maintain customer loyalty,” Managing Director of DSI Tyres Kavinda Rajapaksa said. SLIM Brand Excellence Awards is the Sri Lanka’s premier celebration of Sri Lankan brands that rewards the outstanding efforts of marketers. This gala event for this year was held at Grand Monarch Hotel, Colombo. The Chairman of DSI Tyres, Ranatunga Rajapaksa received the two awards on behalf of the company. Previously, DSI Tyres had won SLIM Turnaround Brand of the Year, Product Brand of the Year, Local Brand of the Year and many SLIM DIGIs awards.
Pakistan’s ex-president, Pervez Musharraf dies aged 79
The 75th Anniversary of National Independence celebrated under the patronage of President, PM
Showers or thundershowers will occur at several places in Western, Sabaragamuwa and Central provinces and in Galle, Matara and Kurunegala districts
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
News4 days ago
NPP for implementation of 13A, says Harini
Features7 days ago
Implementing 13A: Some thoughts
News7 days ago
Intl scientists ask UCLA to reverse Lankan origin ecologist’s suspension
Features7 days ago
Opinion6 days ago
Should only private sector employees pay income tax?
News5 days ago
Ex-diplomat alleges Australian aid project sabotaged, points finger at Medical Supplies Division
Business7 days ago
Govt urged to unlock true potential of Sri Lanka’s Blue Economy
Business6 days ago
CSE planning new product lines to attract investors in greater numbers