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Reserves fall to lowest since 2009, rupee strengthening to be short-lived: report

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by Sanath Nanayakkare

Sri Lanka’s Foreign reserves had dropped to USD 4.1bn in March 2021, the lowest since August 2009, on the back of over US$ 4bn outstanding debt payment during April-December 2021 period, a report issued by First Capital Research yesterday said.

According to the report, rupee appreciation is likely to be short-lived considering Sri Lanka’s depleting foreign reserve position, high foreign currency debt repayment requirement and limited funding sources available in the market are expected to further increase depreciation pressure on the currency during 2Q and 3Q.

“We maintain our exchange rate target for 1H2021 at Rs. 196-202 with 2021 year-end target at Rs. 205-215 as mentioned in our ‘Investment Strategy 2021 – January 2021,” the report recalls.

“Sri Lankan rupee appreciated 5% against the US dollar over the last 2 market days reversing the continuous accelerated depreciation witnessed in January-April 2021. On 12th April, Sri Lankan rupee recorded a historical low of Rs. 201:1 US$. Ministry of Finance (MoF) reported on the same day that the government of Sri Lanka entered into a loan agreement with the China Development Bank (CDB) for US$ 500mn and MoF expected the funds to be disbursed during the same week. Following the announcement, the market registered a steep appreciation with mid-rate recording at Rs. 190.9 on April 19,” it says.

The total foreign debt repayment (capital and interest) for 2021 is US$ 6 bn, according to the report.

Meanwhile FC Research believes that the temporary appreciation in USD-LKR, may adversely impact earnings of export companies such as Hayleys, Haycarb, Dipped Products, MGT Knitting Mills, Teejay Lanka, Expolanka Holdings etc. in the short term.

“However, considering the potential future currency pressure, we expect an overall depreciation of approximately 12% for the rupee providing a significant gain for companies with foreign currency revenue”, FC research predicts.



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Was six-week delay in using Chinese vaccine deliberate asks State Minister

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‘Who accepts responsibility for deaths due to delay in inoculation’

By Shamindra Ferdinando

Urban Development, Coast Conservation, Waste Disposal and Community Cleanliness State Minister Dr Nalaka Godahewa yesterday (13) questioned the failure on their part to administer 600,000 Chinese Sinopharm vaccines while the ground situation deteriorated.

Addressing the media at his ministry, Dr. Godahewa said that delaying the use of the stock donated by China was an unfortunate lapse.

Sri Lanka received the stock on March 31 whereas the government finally gave the go ahead to use it only on May 8.

Responding to media queries, Dr. Godahewa said that stakeholders had been engaged in a debate without using the available vaccines. The State Minister questioned the rationale in delaying tactics while asking whether the delay was deliberate.

The State Minister asked who would accept the responsibility for the deaths of people who were deprived of available vaccines with the government. If those responsible for the entire vaccination process used Sinopharm, the country could have secured additional stocks from China. The State Minister addressed the media in the wake of the country recording cumulative death toll of nearly 900 with over 2000 new cases being reported on a daily basis.

AstraZeneca and Sputnik procured from India and Russia, respectively, were administered within 24 hours after receiving them whereas the Chinese vaccine stock was held up for six weeks.

Acknowledging the delay on the part of the government, Dr. Godahewa said that the vaccination drive was underway.

Blaming the delay on those who found fault with the Chinese vaccines, Dr. Godahewa claimed that strong critic and Samagi Jana Balavegaya MP Harin Fernando was among the recipients of Chinese vaccine. According to the State Minister over 280mn doses of Chinese vaccine had been used so far as the world struggled to cope up with the raging pandemic.

Dismissing Opposition allegations of political interference in Covid-19 strategy, Dr Godahewa emphasized that the health authorities should take final decisions. The government wouldn’t interfere with health authorities, the Minister said, alleging that the Opposition played politics with the Chinese vaccine.

Dr Godahewa said that Opposition Leader Sajith Premadasa sought meetings with representatives of countries soon after he received information on the government of Sri Lanka receiving assistance from those countries.

The State Minister explained how President Gotabaya Rajapaksa played a significant role in the overall government effort to procure much needed assistance from overseas.

Acknowledging shortcomings in the government response to the daunting Covid-19 challenge, Dr. Godahewa questioned the Opposition strategy. Challenging the Opposition response to the pandemic, Dr Godahewa asked whether they built up public opinion against the vaccination programme.

Dr. Godahewa said that in spite of the setback suffered by the vaccination project, the government was able to secure vaccines from China and Russia.

The State Minister said that the fast spreading epidemic was quite a challenge and efforts were being made to bring the situation under control.

The State Minister said that countrywide lockdowns would help control the situation. However, there was no consensus on the matter. Those who earned daily wages opposed lockdowns, the State Minister said, adding that whatever the outcome the final decision on such matters should be taken by health authorities.

Authoritative sources said that while Chinese vaccine stock remained unused, the government administered 927,000 of 1,264,000 covishield (500,000 doses free, 500,000 paid for and the rest through UN’s covax facility) till April 6. Sources pointed out if the Chinese vaccine was used, the country wouldn’t have to experience a shortfall of over 600,000 covishield doses for those who received the first jab.

The National Medicines Regulatory Authority (NMRA) is the authority for approving the use of medicine.

Controversy surrounds the government decision not to administer Sputnik V and Sinopharm for those over 60 though covishield was made available without any age-related restrictions.

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Customs seize 200 mn sticks of foreign cigarettes hidden in 21 containers

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By Prabhath Withana

Customs officials had seized over 200 million sticks of foreign cigarettes worth over nine billion rupees hidden in 21 containers, Customs Department sources said.

The Compliance and Facilitation Division of the Customs Departments investigated the 21 containers that had been marked as ‘Ceylon Black Tea’ and sent from the United Arab Emirates. The containers had been marked for re-exporting to countries such as the Netherlands, Germany, the United Kingdom, customs sources said, adding that the investigators found that forged shipping documents had been made for the containers. A name and address of a Sri Lankan tea company had been mentioned in the documents as the re-exporter.

It has also found that 12 other containers had been re-routed using similar documents from Colombo Port to countries including Belgium, the Netherlands, Germany, France, the United Kingdom and Bangladesh, the customs sources said.

The Customs officials had contacted the names of foreign companies included in the documents but found that they were not aware of the fact that their names had been forged. The customs officials are planning to further investigate the matter with the assistance of international customs officials.

Further investigations are in progress under the guidance of Customs Director General Maj Gen (retd) G.V. Ravipriya by Customs Director Harsha Jayatilake, Deputy Customs Directors Dappula Arewatte and Wijearatne Bandara.

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Kiriella calls for suspending development projects and channeling funds to buy vaccines

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By Saman Indrajith

Chief Opposition Whip Kandy District MP Lakshman Kiriella yesterday called on the government to accelerate procuring Covid-preventing vaccines, and if the latter could not find money it had to channel funds allocated for development projects by suspending them for six months.

Addressing the media, at the Opposition Leader’s office in Colombo MP Kiriella said that the pandemic situation in the country was worsening by the day, and the health experts had issued warnings that Sri Lanka found find itself in the same predicament as India.

“Bodies are floating in the Ganges. The bodies are salvaged and dragged ashore using fishing nets there. We hope and pray that such a calamity may not befall this nation. We are ready to support the government to come out of this crisis and save the country from catastrophe. Yet, the government is not ready to listen. For example, our leader Sajith Premadasa who issued the first warning in Parliament and asked the government to take actions against the pandemic. The government did not listen to him but sough to ridicule us.

“We are telling the government to accelerate the inoculation process. That is the best way out. The government did not take the vaccination process seriously. Instead, it turned to alternatives such as throwing pots into the rivers, drinking herbal concoctions and ritualistic ceremonies such as Bali and Thovil. Even the Speaker in Parliament drank the Dhammika Peniya (syrup) in front of the media and recommended it as the medicine for the coronavirus. We must learn from such mistakes. We must expedite the procurement of vaccines. The government purchased only 500,000 doses. It received a donation of 900,000 vaccines. We have 22 million people. Suppose we use only the vaccines that require double doses, then we need 44 million vaccines. We still have only 1.3 million. The government should make purchases now. If it does not have funds, it should suspend the development projects for six months and use the funds so saved to buy vaccines. We know that the government has no funds. The same happened for the fertiliser relief. The government did not have funds to make purchases so it could not give the fertilisers to farmers and their solution was to ban chemical fertilisers and promote alternatives.

“We call on the government to permit the private sector to import vaccines under a regulated mechanism without letting the importers earn unreasonable profits capitalizing on the misery of people.

“At a discussion the President had with a group of villagers, he was requested to provide a PCR machine to their hospital. The president then said that the PCRs would not be needed as the vaccination had started and all people would be vaccinated. Now, three months have lapsed, and the people are without either a PCR machine or the vaccine. People in the Kandy District have not got the vaccine yet. There is only a single PCR for the entire Central Province – that is the one at the Kandy Hospital. We do not know what has been done with the funds allocated for the health sector procurement. We repeat that vaccination is the only solution.

“There was a presidential task force to formulate a strategy to tackle the pandemic. Its chief went overseas two days ago. Are these the examples set by the rulers to people? Now, it is said that he went abroad for treatment. What about the doctors in this country? What’s wrong with them? When Lalith Athulathmudali was wounded severely by a bomb attack the then government offered to take him to the US and made arrangements to treat him there. Yet, Lalith rejected that offer and said that he trusted Lankan doctors.”

Matale SJB MP Rohini Kaviratne also addressed the press.

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