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Risks for banks may rise on end of restriction on ISB investments : Fitch Ratings

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The end of the suspension on Sri Lankan banks’ investments in international sovereign bonds (ISBs) issued by the Sri Lanka sovereign (CCC) has the potential to increase banks’ exposure to sovereign and foreign-currency funding and liquidity risks, says Fitch Ratings. Banks’ credit profiles are already significantly exposed to the sovereign, with Fitch-rated Sri Lankan banks having about a third of their combined assets exposed to the central government at end-2020. In addition, they face foreign-currency risks, including through their US dollar-denominated ISB investments.

The Central Bank of Sri Lanka (CBSL) on 16 June 2021 revoked the previous indefinite suspension on investments in ISBs by banks. Sri Lankan banks had invested heavily in ISBs, which prompted the CBSL to halt investments in ISBs by banks from December 2020, due to concerns about the pressure on the domestic foreign-exchange market through dollar outflows.

The CBSL now permits banks to purchase ISBs in the secondary market, provided this investment is funded by fresh overseas borrowings.The directive requires banks to adopt risk mitigation measures to bridge maturity mismatches that could arise. Fitch expects Sri Lankan banks to continue to face difficulties in accessing foreign-currency funding due to the sovereign’s low credit rating.

Foreign-currency borrowings declined to LKR881 billion by end-1Q21, from LKR984 billion at end-2019, accounting for 5.8% of sector assets. Refinancing needs remain high as short-term loans made up around 63% of the banking system’s external debt at end-2020.The latest directive stipulates that fresh offshore borrowings sourced to buy foreign-currency government securities have to be invested in both ISBs and Sri Lanka Development Bonds (SLDBs) in equal proportion, and as such would also contribute to increased investments in SLDBs by banks. Banks are the main investors in SLDBs, but their holdings of these securities declined 15% in 2020 to LKR448 billion.

Take-up in SLDBs by banks has been less than the higher-yielding ISBs, which are listed and more widely held. There are no limits on banks’ subscription to SLDB issuances.Fitch-rated Sri Lankan banks’ investments in ISBs and SLDBs accounted for 6.4% of their assets at end-2020. The extent of incremental investments in ISBs and SLDBs by banks remains to be seen, but Fitch expects the banks to add only a limited amount of ISBs and SLDBs.

This is due to the lower appetite of some banks to add to their exposure to foreign-currency government securities and potential funding access challenges. The risks to banks from their holdings of foreign-currency government securities are exacerbated by recent measures that have reduced minimum buffers, such as a reduction in the risk weights on foreign-currency claims on the government held by banks to 10% in 2021 from 20%, and cut in the loss-given-default rates to 10% from 20% when computing expected losses in 2021.

The ‘CCC’ rating on Sri Lanka reflects the sovereign’s challenging foreign-currency external debt repayment burden over the medium term, low foreign-exchange reserves, and high and rising government debt that gives rise to sustainability risks. Sri Lankan banks’ ratings continue to remain constrained by the sovereign credit profile, says Fitch Ratings.



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Sri Lanka Tourism introduces e-learning platform for all SLTDA registered tourist guides.

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As an initiative to uplift the reviving tourism industry in the country, Sri Lanka Tourism Development Authority in collaboration with Sri Lanka Institute of Tourism & Hotel Management (SLITHM) have introduced the continuous professional development (CPD) e-learning platform to all registered guides to enhance their knowledge and skills.

The launch of the continuous professional development (CPD) e-learning platform took place this week under the patronage of Minister of Tourism Prasanna Ranatunga, Secretary of the Ministry S. Hettiarachchi and Sri Lanka Tourism Chairperson Kimarli Fernando.

“Tourist guides play an important role in our tourism sector as they spend a lot of time with visitors from arrival to departure. It is important that our guides stay updated on their professional/technical knowledge and I hope this e-learning platform by Sri Lanka Tourism will help them enhance their knowledge and skills” Sri Lanka Tourism Chairperson Kimarli Fernando shared while the Minister congratulated all the officials who were involved in bringing this initiative to reality.

Knowledge improvement, obtaining expertise knowledge from veterans, develop active participation with guests, improve the link between Tourism institutions & guides are some key objectives of this e-learning platform.

If you are a registered guide with SLTDA, you can now sign up on https://sltda.gov.lk/e-learning/login and avail of the online courses.

A certificate of completion will be given at the end of the course from SLTDA and SLITHM.

 

 

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Impact of Climate Change on marine and fresh water resources and combating water pollution

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Trilateral virtual dialogue among Pathfinder Foundation, Russian International Affairs Council and Asian Confluence

The Pathfinder Foundation (PF) has initiated a trilateral dialogue involving Sri Lanka, India and the Russian Federation to discuss issues of contemporary relevance. The first trilateral dialogue will be held to day 4:30 PM SLST on the “Impact of Climate Change on Marine and Fresh Water Resources and Combating Water Pollution: Best Practices from Russia, Sri Lanka and India”.

For this dialogue, Pathfinder Foundation will be partnering with Russian International Affairs Council and Asian Confluence.

The distinguished panellists for the webinar are, Ambassador GlebIvashentsov, Vice President, Russian International Affairs Council, Ambassador (Retd.) Bernard Goonetilleke, Chairman Pathfinder Foundation, Ambassador. IFS(Retd.) Rajiv Kumar Bhatia, Member Governing Council, The Asian Confluence and Distinguished Fellow, Gateway House,Dr. Anastasia Likhacheva, Director, Centre for Comprehensive European and International Studies, Higher Schoolof Economics, Dr. B. V. R. Punyawardena, Chairman, National Steering Committee on Climate Change Adaptation, Governmentof Sri Lanka, Dr. Fraddry D’Souza, Area ConvenerandFellow, The Coastal Ecology & Marine Resources Centre, TERI Goa,India , Dr. Konstantin Zgurovsky, Senior Advisor, Marine Programme, WWF Russia, Mr. Sarath Premalal, Retired Director General of Meteorology of Sri Lanka and Prof. Vinay Kumar Dadhwal, Director, Indian Institute of Space Science and Technology Professor Indira Gandhi Chair, National Institute of Advanced Studies, India

Those who are interested in participating may kindly register at the following link; https://bit.ly/3AZbYAN Program details are available at https://bit.ly/3zdUkY3 . The event will also be live streamed on the PF Facebook Page https://www.facebook.com/pathfinderfoundation/

 

 

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Doc990 and MyDoctor partner SLVA to extend accessible veterinary services islandwide

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Sri Lanka’s premier digital health solutions service providers, Doc990 and MyDoctor are now enabling customers to access online veterinary services island-wide in partnership with the Sri Lanka Veterinary Association.

The national professional body serving and representing the interests of the veterinary profession in Sri Lanka, the Sri Lanka Veterinary Association (SLVA), is dedicated to providing continued excellence within the profession of animal medicine and the provision of outstanding care for all animals while also actively creating public awareness of the contribution of veterinarians island-wide.

This collaborative effort with Doc990 and MyDoctor will bring pet owners, owners of farm animals and good Samaritans the ability to access remote video consultations with leading, specialist veterinarians of their choosing, without the hassle of physically entering hospital waiting rooms, transporting animals etc. This timely, contactless service will not only be convenient but also a relief to pet owners and caretakers in the backdrop of travel restrictions as a result of the ongoing global pandemic.

Customers can engage in video consultations with their chosen vet by downloading the Doc990 mobile app from the Google Play Store or the Apple Store. Through its widening network of hospitals and medical services, Doc990 strives to make health care accessible and convenient for all Sri Lankans.

 

 

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