Business

Rupee liquidity in banks ‘different from normal’: Central Bank

Published

4 years ago

2022/06/16

By Sanath Nanayakkare

With the spike in policy interest rates, rupee liquidity in the banks is different from what is normal, Yvette Fernando, deputy governor of the Central Bank said at a webinar hosted by the Centre for Banking Studies of the Central Bank.

“According to the reports we have received, the current rupee liquidity in the banks has not caused any distress to their daily transactions. However, in an increased rate environment, sometimes customers switch banks to get higher rates and some even opt to use their deposits to purchase Treasury Bills that earn them higher yields. This is normal when there’s a significant change in interest rates. You know that banks take deposits from customers and invest these funds in various ways to help the growth of the economy, while assuring security and reward to depositors. However, when such significant changes are made to the exchange rate policy and interest rates, banks feel the impacts of these policy decisions on their investment decisions.”

She made these remarks in response to a question from the audience whether the lifting of the fixed exchange rate regime and eye-popping numbers in interest rates could destabilize the banking system.

Elaborating on this particular concern among the public, she said, “Even before the most recent interest rate hike and flexible exchange rate policy, banks encountered stress due to lack of foreign currency in the past 12-18 months. Their foreign remittances base declined and their foreign inflows dropped after Sri Lanka’s credit ratings were downgraded by international ratings agencies. Under such circumstances, the banks had to make loan repayments. New loans couldn’t be taken and existing loans could not be renewed. Some banks were inconvenienced in inter-bank settlements as their foreign inflows were inadequate. The Bank of Ceylon and People’s Bank that provide substantial funds to finance the import of fuel, LP gas, medicines and other essential commodities also felt a significant impact as a result of these developments. That situation led the two state banks to collaborate with other banks to facilitate the critical shipments where the Central Bank also intervened when necessary.”

“Now, the most recent interest rate hike and exchange rate policy have had an even more significant impact on the banks’ assets and responsibilities. However, the capital and liquidity buffers of the banks are at optimal levels and have helped them to operate resiliently despite the impact on their rupee liquidity.”

The deputy governor went on to say that if the need arises to support the banking system with rupee liquidity, the Central Bank can do so within the regulatory provisions made available to it.

“We have the ability to intervene and provide that facilitation within that lawful framework. We are always prepared to do that. Even the Monetary Board of the Central Bank is aware of this situation,” she said.

“We recently allowed the banks to operate within a new space of facilitated prudential requirements in line with their assets and responsibilities. I believe that within a short period of time, the adjustments in the macroeconomic framework and measures taken by the government and the central bank will help boost foreign reserves and significantly ease these inconveniences. Thus the banks will be able to operate just as in normal conditions. This will take about a month or two to materialize. Of course, to achieve that, confidence in the Sri Lankan economy needs to be restored. A program with the IMF will help restore that confidence which in turn should revive the foreign exchange market, creating a more comfortable situation for banks to operate,” she said.

Meanwhile, Prime Minister Ranil Wickramasinghe said on Tuesday that Sri Lanka doesn’t have any rupee income, and by the end of the year the rupee crisis would be solved with the introduction of taxes.

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Business

SpaceX IPO debuts in US markets, Musk becomes world’s first trillionaire

Published

17 hours ago

2026/06/13

Priyan

The Musk led company sold $75bn in shares before the market debut [Aljazeera]

SpaceX has debuted on US markets with a market valuation of more than $2 trillion, minting CEO Elon Musk as the world’s first trillionaire.

Shares opened on Friday at $150 per share, marking a 11 percent increase from the initial public offering (IPO) price of $135, valuing the company at $1.96 trillion and putting the aerospace company on track to become the sixth-largest company in the United States.

The stock surged 18 percent to $159 per share, up from the $135 it had been priced at, as the trading day came to a close.

Markets more broadly ticked higher amid a possible interim peace deal between the United States and Iran that could open the Strait of Hormuz. The Dow Jones Industrial Average is up 0.6 percent, the Nasdaq is up 0.2 percent, and the S&P 500 is up 0.35 percent as trading wraps up for the week.

The company sold $75bn in shares, immediately valuing it at $1.77 trillion. The IPO was oversubscribed four times higher than was otherwise expected, according to the Reuters news agency.

Of the institutional investors allocated, according to Bloomberg News, as much as 70 percent went to what are called long-only investments — a strategy in which holders buy assets based on the expectation that their value will grow over time — and sovereign wealth funds, including those from Saudi Arabia and Kuwait as well.

SpaceX President Gwynne Shotwell and Chief Financial Officer Bret Johnsen rang the opening bell at Nasdaq MarketSite in New York City at 9:30am local time as US markets opened.

On Thursday, protesters gathered outside the MarketSite to protest the IPO amid continued allegations that Grok, part of xAI, a subsidiary of SpaceX, allowed users to create non-consensual deepfake sexualised images before the IPO debut.

Shares of SpaceX did not trade until the middle of the trading day as the exchange collected buy and sell orders and underwriters delayed trading until supply and demand were balanced.

“We would expect SpaceX to see an immediate pop in trading due to the hype around the deal, north of 20 percent perhaps,” said Samuel Kerr, global head of equity capital markets at Mergermarket. “Anything lower would actually make me nervous.”

Exchanges and trading firms are eager to avoid the technical mishaps that marred Meta’s 2012 debut. With SpaceX widely viewed as a dress rehearsal for a new generation of mega-listings, market participants will also be watching for signals on investor appetite in advance of forthcoming IPOs for AI heavyweights Anthropic and OpenAI.

The landmark listing cemented Musk’s status as the first trillionaire ever and propelled SpaceX into the ranks of the world’s most valuable companies — even though the firm posted a loss of nearly $5bn last year and generated only a fraction of the revenue brought in by similarly valued tech giants.

The surge comes amid growth driven by its Starlink subsidiary, which drives as much as 80 percent of its revenue.

On Friday, SpaceX launched its Falcon 9 rocket with 29 satellites into space from Cape Canaveral in Florida.

[Aljazeera]

Business

Indo-Lanka Chamber hosts dialogue on Sri Lanka’s investment future

Published

20 hours ago

2026/06/13

Thilina Walpola

Interactive session with Aritha Wickramasinghe

The Indo-Lanka Chamber of Commerce & Industry (ILCCI), affiliated to The Ceylon Chamber of Commerce, hosted an interactive session on Sri Lanka’s Investment Future: Policy, Opportunity & Growth at Jetwing Colombo Seven. The session was attended by Dr. Satyanjal Pandey as Chief Guest, while Aritha Wickramasinghe delivered the keynote address in his capacity as Chief of Staff to the Office of the Presidential Special Envoy on Foreign Investment, Hanif Yusoof.

ILCCI President M. Raghuraman, in his remarks, expressed appreciation to Dr. Pandey for his service during his tenure in Sri Lanka and underscored the timeliness and importance of the session topic in the context of the current global economic and geopolitical climate.

Addressing the gathering, Dr. Pandey observed that in a period marked by geopolitical and economic turbulence – reliability, trustworthiness, and secure supply chains have become increasingly important. He also highlighted the strong and growing economic partnership between India and Sri Lanka, noting several significant Indian investments in Sri Lanka, including those by ITC Limited and CEAT Limited, while indicating that further investments are expected in the future.

As a representative of the state, Aritha Wickramasinghe stated that it is the responsibility of the government to ensure that, even amid global turbulence, Sri Lanka remains stable in its policy direction, credible in its economic management, and consistent in its engagement with investors. He also emphasised the opportunities available to the Sri Lankan economy through deeper engagement with India’s fast-growing economy, noting that while India and Sri Lanka are neighbours, the relationship is regarded as one of family rather than mere proximity.

The session which included a highly engaging and interactive Q&A session with the audience, concluded with a productive exchange of views between the distinguished guests, speakers and participants, reaffirming the importance of continued dialogue and collaboration in strengthening investment and economic ties between Sri Lanka and India.

Business

Australia and Sri Lanka strengthen maritime security partnership

Published

20 hours ago

2026/06/13

Thilina Walpola

The Australian Border Force and Sri Lanka Coast Guard have launched Disi Rela 2026, marking the third consecutive year of the joint maritime security initiative aimed at strengthening maritime surveillance, operational capability, and public awareness across Sri Lanka’s coastal regions.

This year, Disi Rela 2026 expands its community engagement and public awareness activities to Sri Lanka’s Eastern Province, following successful activations conducted in the Western and Southern Provinces in previous years.

Meaning “keeping a watchful eye over the maritime environment,” Disi Rela reflects the continued partnership between Australia and Sri Lanka to strengthen maritime security, combat transnational maritime crime, and promote safer seas across the region. Through intelligence sharing, operational cooperation, advanced equipment support, and public awareness initiatives, both countries continue to work together to address threats including people smuggling, drug trafficking, illegal fishing, and other unlawful maritime activities.

Over the past three years, the Australian Government has supported Sri Lanka’s maritime security efforts under the Disi Rela initiative through the donation of 24 surveillance drones, three all-terrain vehicles (ATVs), three Stabicraft patrol vessels, and the establishment of a dedicated 24/7 hotline number — 106.

Further strengthening Sri Lanka Coast Guard’s operational capability, the Australian Government will donate an additional five all-terrain vehicles (ATVs) under Disi Rela 2026 to support coastal surveillance and rapid response operations.

In reflecting upon the continued partnership and shared commitment of both nations to safeguard Sri Lanka’s maritime boundaries and coastal communities, the Director General of the Sri Lanka Coast Guard,