News
Private creditor debt restructuring to be completed by March
From June to November 2023, the Central Bank had reduced the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by about 6.5 percent, Assistant Governor of the Central Bank of Sri Lanka, Dr. P. K. G. Harischandra said.
That move had been made in response to the successful management of inflation, prompting the Central Bank to ease its previously tight monetary policy.
“Simultaneously, there was a gradual decrease in interest rates; however, this decline occurred at a measured pace. The transmission of policy rate adjustments to the money market is not instantaneous, requiring a certain period for full effect. During the Monetary Policy Board meeting conducted on January 22, 2024, the Central Bank of Sri Lanka opted to maintain the existing policy interest rates. This decision was based on the belief that additional time was needed for the money market to fully incorporate the earlier 6.5 percent reduction in interest rates, thus influencing a more comprehensive adjustment.,” he said.
Harischandra mentioned a decline in both lending rates and interest rates associated with Treasury bills. The Assistant Governor further indicated that forthcoming adjustments would involve a reduction in both lending rates and deposit interest rates.
“In December 2023, the inflation rate stood at approximately four percent. Interest rates for deposits persist in the range of nine to 10 percent, providing depositors with continued value for their savings. With the ongoing economic recovery, there is an opportunity to bolster it by lowering lending rates. This, in turn, would facilitate more accessible borrowing and encourage increased investment. Notably, the fourth quarter of 2023 marked a positive turn, breaking a streak of six consecutive quarters of negative growth, signaling encouraging economic progress.,” he said.
Harischandra emphasized the necessity of reducing lending rates to sustain the current positive economic momentum. He noted that the Central Bank of Sri Lanka aims to keep inflation at approximately five percent, enabling interest rates to range between eight and 10 percent. This strategy aims to provide depositors with the benefit of seeing an appreciation in their funds, while simultaneously offering entrepreneurs the opportunity to borrow at more affordable rates.
Harischandra said in late 2022, inflation was at 70 percent. In January 2024, inflation will be around seven percent because of the hike in the Value Added Tax (VAT). Inflation can happen because of supply-side and demand-side pressures.
“There is no inflationary pressure stemming from demand because the purchasing power of the population remains low. Over the course of 2022 and 2023, the prices of goods experienced a considerable increase of about 70 percent. While the value of the rupee saw a substantial 45 percent decline in 2022, it only appreciated by 12 percent in 2023. Currently, exchange rates are stable, and there is no inflationary pressure arising from that aspect. Additionally, with the price of crude oil staying below 80 dollars per barrel, we are confident that even if inflation reaches seven percent in January, it will likely be a temporary spike,” he said.
The Assistant Governor noted that an inflation rate of approximately five percent is considered typical in emerging markets and is viewed as an indicator of economic well-being. Nevertheless, the growth of purchasing power among the populace will require some time.
He further said, “a considerable number of individuals are opting to leave the country, prompting many companies to increase salaries. This adjustment has become necessary to retain the essential labour force for their operations. However, it’s important to clarify that these salary hikes may not be deemed sufficient.”
Harischandra said they had restructured domestic debt. International debt comes in two categories, i.e., international sovereign bonds and bilateral debt. Significant progress has been made in restructuring bilateral debt..
“Paris Club, China and India have agreed to help us. We now have to deal with the international sovereign bonds. We are working with the IMF and debt advisors. Furthermore, we hope to come to preliminary agreements by the end of this quarter,” he said.
Japan Maritime Self-Defence Force (JMSDF) MURASAME which arrived in Sri Lanka on 22 March 2025 for replenishment, departed the island on Tuesday (25 Mar).
The Sri Lanka Navy bade customary farewell to the departing ship at the Port of Colombo, following naval traditions.
During the stay in Sri Lanka, crew members of JMSDF MURASAME visited some popular tourist destinations within the Colombo city.
News
UK sanctions Shavendra, Wasantha, others in line with Labour party’s election pledge – Secretary of State
UK Secretary of State for Foreign, Commonwealth and Development Affairs, David Lammy, has said that sanctions were imposed on former Army Commanders General Shavendra Silva, General Jagath Jayasuriya, Admiral of the Fleet Wasantha Karannagoda and one-time LTTE Ampara-Batticaloa commander Vinayagamoorthy Muralitharan, alias Karuna Amman, in accordance with an assurance given to the electorate at the 2024 July general election.
The Labour party won the July 2024 general election.
The British government statement quoted Lammy as having said that he made a commitment during the election campaign to ensure that those responsible would not be allowed impunity. Lammy emphasised that this decision ensured that those responsible for past
human rights violations and abuses were held accountable.
The text of the statement: “The UK sanctions former Sri Lankan commanders and an ex–Liberation Tigers of Tamil Eelam (LTTE) commander responsible for serious human rights violations and abuses during the civil war.
* Sanctions aim to seek accountability for serious human rights violations and abuses, committed during the civil war, and to prevent a culture of impunity.
* UK is committed to working with new Sri Lankan government on human rights, welcoming their commitments to national unity.
The UK government has imposed sanctions on 4 individuals responsible for serious human rights abuses and violations during the Sri Lanka civil war, including extra-judicial killings, torture and/or perpetration of sexual violence.
The individuals sanctioned by the UK today include former senior Sri Lankan military commanders, and a former LTTE military commander who later led the paramilitary Karuna Group, operating on behalf of the Sri Lankan military against the LTTE.
The measures, which include UK travel bans and asset freezes, target individuals responsible for a range of violations and abuses, such as extra-judicial killings, during the civil war.
Secretary of State for Foreign, Commonwealth and Development Affairs, David Lammy, said:
The UK government is committed to human rights in Sri Lanka, including seeking accountability for human rights violations and abuses which took place during the civil war, and which continue to have an impact on communities today.
I made a commitment during the election campaign to ensure those responsible are not be allowed immunity. This decision ensures that those responsible for past human rights violations and abuses are held accountable.
The UK government looks forward to working with the new Sri Lankan government to improve human rights in Sri Lanka, and welcomes their commitments on national unity.
During her January visit to Sri Lanka, Minister for the Indo-Pacific, Catherine West MP, held constructive discussions on human rights with the Prime Minister, Foreign Minister, civil society organisations, as well as political leaders in the north of Sri Lanka.
For communities to move forward together, there must be acknowledgement, and accountability for past wrongdoing, which the sanctions listings introduced today will support. We want all Sri Lanka communities to be able to grow and prosper.
The UK remains committed to working constructively with the Sri Lankan Government on human rights improvements as well as their broader reform agenda including economic growth and stability. As part of our Plan for Change, the UK recognises that promoting stability overseas is good for our national security.
The UK has long led international efforts to promote accountability in Sri Lanka alongside partners in the Core Group on Sri Lanka at the UN Human Rights Council, which includes Canada, Malawi, Montenegro, and North Macedonia.
The UK supported Sri Lanka’s economic reform through the International Monetary Fund (IMF) programme, supporting debt restructuring as a member of Sri Lanka’s Official Creditor Committee and providing technical assistance to Sri Lanka’s Inland Revenue Department.
The UK and Sri Lanka share strong cultural, economic and people to people ties, including through our educational systems. The UK has widened educational access in Sri Lanka through the British Council on English language training and work on transnational education to offer internationally accredited qualifications.”.
By Samanthi Weerasekera
China and the United States are jointly funding the ambitious Ambuluwawa Cable Car Project, which, once completed, will offer an unparalleled experience, with cable cars operating over a kilometer between two mountains without any support structures.
During a visit to the project site on Saturday (23), Chinese Ambassador Qi Zhenhong said that this project is another symbol of the strengthening bond between Sri Lanka and China. “It is a pleasure to have a Chinese investor involved in such a project that further strengthens the bond between Sri Lanka and China,” the Ambassador said, reflecting on the significant international collaboration.
NDF Kandy District MP Anuradha Jayaratne, Chairman of the Ambuluwawa Board of Trustees, stated that the feasibility study for this project was first conducted 18 years ago. He credited the success of the project to the joint investments from China and the United States. “I would like to gratefully recall that it was possible to turn this dream into a reality because of the investors from China and America,” Jayaratne said.
He said that the first phase of the Ambuluwawa Cable Car Project, scheduled for completion later this year, is expected to provide a unique travel experience for visitors. Passengers will embark on a 600-meter cable car journey from the entrance gate of the Ambuluwawa Religious and Biodiversity Complex to the summit of Ambaluwawa Mountain. From there, a thrilling 1.2-kilometer ride will take them unsupported to the Ambuluwawa Tower, offering breathtaking views and a glimpse into Sri Lanka’s natural beauty.
Jayaratne noted that the second phase of the project will extend the cable car line to the Gampola Railway Station. This addition will provide a seamless connection for foreign tourists travelling by the Badulla train and those heading to Nuwara Eliya, allowing them to experience Sri Lanka’s first-ever cable car ride. The second phase will not only enhance tourism but is also expected to transform Gampola into a world-class tourist and commercial hub.
JMSDF MURASAME departs island
Heavy showers about 100 mm can be expected at some places in Western, Sabaragamuwa, Southern and Uva provinces
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