Business
Policy rates to hold steady amidst sweeping measures to insulate economy: First Capital
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.
Business
ADB pledges over $1 billion annually to Sri Lanka in post-cyclone recovery push
Asian Development Bank (ADB) President Masato Kanda met with Sri Lanka Prime Minister Harini Amarasuriya at ADB’s Manila headquarters recently. The meeting reaffirmed the strong development partnership between ADB and Sri Lanka, with both leaders underscoring their commitment to post-cyclone recovery, inclusive growth, and advancing women’s equality.
“Sri Lanka’s resilience in the face of crises has been remarkable,” said Kanda. “We are committed to helping Sri Lanka rebuild after Cyclone Ditwah, while also investing in the country’s future by empowering women entrepreneurs and strengthening education and essential skills.”
Looking ahead, ADB is ready to provide more than $1 billion annually to Sri Lanka from 2026 to 2029. This financing will target macroeconomic stability, private sector-led growth, education and skills development, and resilient infrastructure. Key initiatives include a major digital transformation program to help unlock Sri Lanka’s digital economy, alongside support for its accession to the Regional Comprehensive Economic Partnership to deepen its integration into regional trade and investment networks.
During their discussion, Kanda emphasized ADB’s response to the devastation caused by Cyclone Ditwah. Building on emergency financing already mobilized, ADB is fast-tracking an emergency assistance loan to restore damaged infrastructure and support affected livelihoods.
With Dr. Amarasuriya serving as the keynote speaker for ADB’s International Women’s Day event, the leaders highlighted women’s equality as a cornerstone of inclusive development. Kanda noted ADB’s long-standing work as an implementing partner of the Women Entrepreneurs Finance Initiative, which expands access to finance, business skills training, and policy reform for women-owned enterprises. This partnership has helped drive lasting change, with Sri Lanka becoming one of the first countries to adopt the Women Entrepreneurs Finance Code at the national level in March 2025.
Dr. Amarasuriya also engaged in dialogue facilitated by ADB to advance Sri Lanka’s skills agenda, including discussions on referencing skills and qualifications with the Association of Southeast Asian Nations and on mutual areas of interest with the Philippines related to technical and vocational education and training.
Business
New Board appointed to lead Unit Trust Association of Sri Lanka
The Unit Trust Association of Sri Lanka (UTASL) announced its new Board of Directors, appointing Jeevan Sukumaran of SENFIN Asset Management as President. The Board assumes leadership at a time of significant growth and resilience in Sri Lanka’s Unit Trust industry. Over the past five years, the number of unit holders has more than doubled, while assets under management have grown substantially, reflecting a clear shift in investor behaviour amid evolving economic conditions.
The 2026–2027 Board includes Vice President Kavin Karunamoorthy (First Capital Wealth Management), Secretary Asanka Herath (Lynear Wealth Management), Assistant Secretary Gayan De Silva (Capital Alliance), and Treasurer Wishan Perera (Softlogic Invest).
President Jeevan Sukumaran highlighted the importance of expanding the industry’s reach and increasing retail participation nationwide. “Whilst the Unit Trust industry has grown significantly in recent years, the next phase must focus on broadening retail investor participation across Sri Lanka’s different geographic/demographic sectors, with the key priority being strengthening investor education and awareness, particularly outside major urban centres. Improving financial literacy and expanding access to professionally managed investment solutions are essential to building long-term confidence and encouraging more Sri Lankans to invest in unit trusts.”
The new Board intends to build on the industry’s recent momentum by prioritising investor education, digital accessibility, and product innovation. Over the coming years, enhanced digital platforms are expected to make Unit Trust products more accessible, enabling investors across the country to participate in capital markets in a convenient and transparent manner.
Business
Indiya at Cinnamon Life enters a flavourful new chapter
Colombo’s vibrant dining landscape has received a fresh infusion of flavour with the renewed culinary direction of Indiya, the signature Indian restaurant perched high above the city at Cinnamon Life at City of Dreams. With celebrated Indian chef Mukesh Joshi now steering the kitchen, the restaurant is presenting a menu that celebrates the depth, diversity and soul of Indian cuisine while subtly weaving in Sri Lankan influences.
Located on the spectacular Level 23 of the sprawling Cinnamon Life complex, Indiya’s setting itself feels like a prelude to the culinary journey that unfolds at the table.
The restaurant’s sweeping views of Colombo’s skyline provide a dramatic backdrop to a menu designed to take diners across India’s many culinary regions — from the fragrant biryani traditions of Awadh to the bold spice profiles of coastal kitchens.
At the heart of this new chapter is Chef Mukesh Joshi, a culinary craftsman whose career spans some of India’s most renowned hospitality institutions as well as prominent dining establishments in the Middle East.
Having honed his skills at luxury hotels such as The Westin and St. Regis Mumbai before leading kitchens in Dubai’s thriving Indian dining scene, Joshi is known for his ability to balance traditional flavours with contemporary finesse.
At Indiya, his philosophy is simple yet compelling: celebrate the authenticity of Indian cooking while creating dishes that encourage sharing and conversation.
The experience begins with a vibrant array of small plates that capture the playful spirit of India’s street food traditions. The crisp Sev Papdi Chaat offers bursts of sweet, tangy and spicy notes, while a generous Pakora Platter brings together an assortment of golden-fried fritters that evoke the comforting flavours of roadside tea stalls across the subcontinent.
From there, the menu moves naturally into the world of the tandoor — the clay oven that lies at the heart of many Indian kitchens. Among the highlights is the Hariyali Tandoori Gobi, where cauliflower is marinated in a fragrant blend of herbs before being charred to smoky perfection. Equally intriguing is the Rajma Galouti, a vegetarian reinterpretation of the famed Lucknowi kebab, delivering a melt-in-the-mouth texture that surprises and delights.
Seafood lovers will find much to savour as well. Jhinga Koliwada, a coastal delicacy of spiced prawns fried to a crisp exterior, offers a lively contrast to the delicately seasoned Rawa Fried Surmai. These dishes reflect Chef Mukesh’s confident handling of spice and texture — two essential pillars of Indian cooking.
No Indian dining experience would be complete without the ritual of sharing freshly baked breads, and Indiya’s basket arrives warm and inviting. Chilli Cheese Naan brings a playful modern twist to a classic favourite, while flaky parathas and stuffed Aloo Kulcha provide comforting companions to the restaurant’s richly spiced curries.
By Ifham Nizam
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