Re: Thread for News on CSE and SL Economy

[ruwan326]

Sri Lankan shares post over 13-week closing high; rupee firmer
November, 1, 2019


Sri Lankan shares rose on Thursday to close at their highest in more than 13 weeks as investors took positions two weeks ahead of presidential polls, analysts said.

** Sajith Premadasa, the housing minister and one of the two presidential front-runners, announced his election manifesto, which is seen by analysts as a “broader policy framework”. His close rival Gotabaya Rajapaksa has pledged a tax overhaul that would reduce tax to 8% from the current 15% and abolish many taxes. ** Many political analysts Reuters spoke to said the tight race between the two presidential candidate was still on.

** The benchmark stock index ended 0.55% firmer at 5,990.24, its highest close since July 29. The index rose 1.2% last week, but is down 1% for the year.

** Financial and telecom stocks were among the top gainers, with Hatton National Bank Plc rising 2.9%, Sri Lanka Telecom Plc ending 2.2% firmer and Dialog Axiata Plc adding 0.8%.

** The rupee ended 0.25% firmer at 181.05/30 per dollar, compared with Wednesday’s close of 181.50/60. The currency is up 0.86% so far this year.

** Foreign investors were net sellers of riskier assets for the seventh straight session on Thursday.

** They sold net 102 million rupees ($563,380) worth of shares, extending the year-to-date net foreign selling to 4.32 billion rupees of equities, according to index data.

** Equity market turnover was 1.28 million rupees ($7,069.87), well above this year’s daily average of about 667.6 million rupees. Last year’s daily average was 834.0 million rupees.

** Meanwhile, foreign investors bought government securities on a net basis for the first time in three weeks, buying a net 1.97 billion rupees worth of government securities in the week ended Oct. 23.

** Total foreign outflows from government securities through Oct. 23 stood at 53.63 billion rupees, according to central bank data.

** Sri Lanka’s central bank left its key rates unchanged on Oct. 11 after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.

http://bizenglish.adaderana.lk/sri-lankan-shares-post-over-13-week-closing-high-rupee-firmer/

[sereneTop contributor]

Thanks Ruwan.
Two weeks more.
Very active two weeks are expected.
We might be able to derive a better conclusion about the Outcome of the election through CSE before the Poll itself.
At least the Sentiment of market movers regarding GR or SP.

[ruwan326]

Sri Lanka has high currency risk, debt could jump further from depreciation: IMF

November 6, 2019




Sri Lanka’s debt which had already jumped after the latest collapse of the rupee, could rise steeply if deprecation continued the International Monetary Fund has warned saying currency risk was high.

“Public debt is estimated to have increased significantly to about 90 percent of GDP at end-2018, reflecting weaker economic performance and the sizable depreciation of the rupee,” an IMF debt sustainability analysis noted.

“Currency risk, notably related to the U.S. dollar, is high.”

The IMF however had nothing to curb the monetary indiscipline and Sri Lanka’s deadly ‘flexible exchange rate’, a highly unstable soft-peg backed by contradictory money (excess liquidity) and exchange (downwardly skewed convertibility undertakings) that lead to sudden losses of credibility in forex markets and steep collapses of the rupee.

Critics have pointed out that fiscal gains made by politically costly tax increases have been wiped out by currency depreciation of Sri Lanka’s soft-peg.

In 2018 the flexible exchange rate collapse had led to a 7.4 percent increase in public debt.

The IMF said a eat map analysis indicates “high risks” to debt sustainability.

“The debt burden benchmark of 70 percent of GDP and gross financing need benchmark of 15 percent of GDP are exceeded in the program and the shock scenarios during the projection period,” the agency said.

“Debt profile analysis indicates a moderate degree of vulnerabilities related to market perception, external financing requirements and debt denominated in foreign currency.

“The share of debt held by non-residents is above the high-risk threshold.”



https://economynext.com/sri-lanka-has-high-currency-risk-debt-could-jump-further-from-depreciation-imf-30843/

[ruwan326]

Foreign investors buy Sri Lanka rupee bonds for third week

November 10, 2019

Foreign investors have bought Sri Lanka rupee bonds for the third week in a row, official data show, after some capital flight that came with a reversal of money policy from around August.

The stock of rupee bonds held by foreign investors grew to 114.3 billion rupees in the week to November 06, from 112.5 billion rupee a week earlier, central bank data show.

In the week to October 23, Treasuries held by foreigner climbed to 110.8 billion rupees from 108.9 billion a week earlier.

Sri Lanka central bank abandoned prudent monetary policy it had been conducting up to July, steadily mopping inflows permanently to keep a rupee peg strong and build up forex reserves.

However it allowed excess liquidity build up and then started to actively print money through open market operations to artificially push up down rates.

There have been calls to bring specific against specific actions of the central bank’s domestic operations that trigger monetary instability, currency collapses, which then trigger output shocks and political instability.

These include a so-called buffer strategy (under-rolling over maturing bonds and repaying them with bank overdrafts which are re-financed with central bank credit (printed money) and Zoros style swaps (a type of liquidity generating short term forward between the Treasury and Central Bank which puts pressure on the peg in the same way as printed money).

Skewed convertibility undertakings (delaying the sale of dollars to strengthen the peg until a ‘disorderly fall’ of the rupee – usually when credit or excess liquidity picks up, but buying dollars without a similar
‘disorderly appreciation’ especially when credit is weak.

Data showed that in September 2012, the central bank had bought two million dollars from banks without a ‘disorderly appreciation’ after monetary policy was reversed.

https://economynext.com/foreign-investors-buy-sri-lanka-rupee-bonds-for-third-week-31422/

[The Invisible]

Sri Lanka’s killer ‘flexible exchange rate’ strikes again: Bellwether



ECONOMYNEXT – With just about six months of allowing people to get on with their economic lives peacefully, Sri Lanka’s central bank has bombarded the monetary system with tens of billions of printed rupees to unleash another bout of instability.

The current administration’s economic performance – which was lacking in growth boosting liberalizations, but continued state expansion and worsened price controls – was badly hit by successive bouts of monetary instability, currency collapses and trade controls that came from the deadly ‘flexible exchange rate’.

As pointed out earlier (President throws monkey wrench at central bank reforms) it is difficult for a soft-pegged central bank to generate a full-blown balance of payments crisis when private credit is weak as now and it is also easier to get the credit system out of a collapse.

But with sufficient excess liquidity injections instability can be generated. Instability will get worse, when state or private borrowings spike.

Given the excessive monetary instability generated by the central bank in the past few years – let’s face it we have a gold-taxing, Nixon shocking central bank, what more needs to be said – the public should view the planned reforms to the central bank with great suspicion.

Monopoly Mercantilist Power

A modern central bank, by virtue of being a state agency with a monopoly, has powers drawn from the state which is no ordinary Mercantilist has, except perhaps archetypical agencies like the British East India Company, which had its own army.

The Governor and the Company of Bank of England was also a classic Mercantilist organization, but it was privately owned, and was therefore subject more public scrutiny and parliamentary oversight. It was also kept in check by the gold standard.

Sri Lanka’s central bank and that of India is wielding its monopoly power, with the same ruthless discharge of the control mindset but with greater powers than any 17th century Mercantilist ever had with the ability to issue paper money and depreciate the currency at will.

The Bank of England for example had to get parliamentary approval to float the currency (The Bank Restriction Act), or depreciate.



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Sri Lanka's Hambantota Port, vocational outfit train youth for harbour jobs














Given what was done to the people since 2015 in particular with a collapsing currency, REER targeting, gold taxes, car taxes, LTV controls on three-wheelers no less, the planned monetary reforms should be viewed with the most considerable caution.

What Adam Smith said of private Mercantilists can also be applied to Sri Lanka’s central bankers or that of India or Pakistan who bust currencies and impose controls with the same vigor.

“The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous but with the most suspicious attention,” Smith wrote in the Wealth of Nations.

“It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

Monetary window dressing

What is confusing is that the central bank is now promising to end money printing, apparently genuinely. But is then printing money through open market operations and other means to generate instability.



Unlike a classical Mercantilists, the intention may not be bad. But it does not matter how the excess liquidity injections are made, the effects are the same.

If the promise to end money printing was genuine, what happened in August 2019, and the liquidity disruptions should not have taken place.

The current printed money land mines were set off by the central bank barely days after this columnist wrote is support for the planned controls on money printing.

Up to around July 2019 dollars were bought by the central bank to create base money but rupees were mopped up steadily by selling down Treasury bills (see blue area). There were also overnight repo auctions to mop up cash. On July 17, 17 billion rupees in excess money was deposited at the floor rate window.

Then mopping up stopped and excess liquidity started to build up, probably from dollar purchases (see green area). On August 08, 20 billion rupees was printed suddenly on top of unsterilised excess liquidity. There were also term injections and outright purchases around the time.


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These cash bombshells show that even if by law the central bank is stopped from taking large volumes of bills from the auctions, it will take them through other means and dump reckless quantities of liquidity on money markets. It will then be justified on the basis of conducting ‘monetary policy’.

When one avenue is blocked, the central bank’s domestic operations department finds another to generate instability.

Then on August 16, the central bank suddenly brought down its Treasury bill stock to Rs77.8 billion from Rs106 billion. Before that, up to Rs25 billion of money was printed overnight and also through term reverse repo contracts.

A few years ago, the bank stopped showing the total bills it takes against central bank credit to the public and understated the bill stock. Was it done to hide the actual bill stock from the people?

The great window dressing exercise left Rs50 billion of excess liquidity in the banking system. The rupee went sliding.

Whom are we fooling?

Floating with excess liquidity: A crime?











A look at recent spikes in excess liquidity tells its own story.

In April 2018, the central bank printed tens of billions of rupees, after releasing liquidity in March. In April the exchange rate can be seen absolutely flat. The central bank was buying dollars (even as it was printing money) in April when remittances come, and export firms convert dollars to pay salaries.

It was pegging with a strong side convertibility undertaking – i.e. preventing the rupee from appreciating.

Then after excess liquidity spikes and the pressure on the exchange rate develops, the exchange rate is floated without mopping up excess liquidity.

The central bank, which was stopping appreciation and buying dollars with great enthusiasm, is markedly reluctant to do the same in the opposite direction. In fact, to deploy weak-side convertibility undertaking the fall has to be ‘disorderly’.

Why not also buy dollars only if the appreciation is disorderly? Talk about a weighted dice.

Not only is there a bias to depreciate, but the central bank also floats the rupee with excess liquidity, built up during the pegging period with the acquisition of foreign assets (dollars) or Treasury bills (domestic assets). Or both, as in the case of August 2019.

No attempt is made to withdraw the liquidity to make the monetary system ready for a float.

As a result, the currency slides, importers and foreign investors panic, then exporters hold back. This bias against the helpless rupee should be outlawed or criminalised as fast as possible.

In August 2018 (last year), after the rupee stabilised the central bank against bought dollars at around 160 to the US dollar, and built up a liquidity spike.

In a tragic-comedy, the central bank also bought dollars through a swap – Singapore has outlawed swaps even for third party banks though Hong Kong hasn’t – and dug its own grave.

Does the central bank believe that rupees created from dollars are different from rupee created from T-bill purchases, and they cannot push the peg down?

There are two reasons which make rupees created from dollars better than rupees created from T-bill purchases, but both have the same downward pressure on the peg.

One is that there are dollars in reserves to defend. The other is that when the dollars are sold, liquidity tightens and the overnight rates go up, to strengthen the peg.

But if dollars in a swap has to be retained to unwind the swap, the reserves cannot be used to sell and defend the currency.

It’s the call money rate, stupid

It is not necessary to have substantial cash shortages to tighten the system. A cash short of about 5 to 10 billion rupees in enough. Then banks can borrow from the lending window at the ceiling policy rate, and the currency can be floated.

James Carville, campaign manager for Bill Clinton, once said [its] the economy, stupid.

All that this columnist can say is that ‘It is the call money rate, stupid. The greatest virtue of buying dollars to expand reserve money is that it can be sold, and when it does the call money and repo rates go up.

In any case none of this will happen if the call money rate is targeted with new printed money.

Repo rates are a good indicator of actual market conditions, and since the feedback loop is very fast.

This central bank, in the run-up to the August/September 2018 monetary debacle, kicked the primary dealers out of the system because they were bidding at high rates for money? Can anyone believe this? Yet it is true.

According to recent media reports, the central bank officials had told the media that it was trying to control the call money rate.

Money Market Killer

In the July to August 2019 debacle the central bank completely killed the overnight money market.



This should be a lesson to all students of classical economics in general and soft-pegged Mercantilism in particular.

In June there was a credit spike. A couple of weeks later repo and call money market became active as existing money was exchanged to clear transactions and keeping a reign on instability.

As rates started to edge up, massive liquidity injections were made to keep call rates low, expanding base money suddenly, taking away all restraints.

Liquidity is not just provided to just to cover any short but billions of excess cash is provided.

All activity is killed. During this time, primary dealers were out of the open market operations, which makes the effect more pronounced.

The targeting of rate below the window rate, with liquidity shocks, shows an unusual recklessness for any central bank, but particularly one that that is trying to build a ‘reserve buffer’ and is facing problems repaying foreign debt.

Why is there a two-way policy rate? It is to help keep the exchange rate strong. Wider the better for the exchange rate.

This central bank recently made a lengthy statement about its monetary policy framework and flexible inflation targeting – whatever that is – and the impossible trinity of monetary policy objectives. It was an absolutely anti-bullionist, banking school type of work, which was full of contradictions.

But that is fine. If the anti-bullionists did it, why not Sri Lanka’s central bank one may ask?

But then how come the rupee is defended – only after a disorderly fall, mind you, showing the bias to depreciate – while the call money rate is targeted? Why isn’t there a floating exchange rate?

If that is the thinking, if August 2019 is a sample of things to come, this columnist shudders to think what may be in the amendments to the Monetary Law Act.

State Failure

This country has suffered too long at the hands of soft-peggers. From 1951 to 2019. But there is no end in sight to this suffering and hardships. It seems that the deadly downwardly – disorderly – biased, ‘flexible exchange rate’ is going to stay.

In 2019, there is also unprecedented financial repression. Is this 1971 or 2019? Is Sirimavo Bandaranaike the Prime Minister or is it Ranil Wickremesinghe?

Sri Lanka’s markets are working. In fact, the banking sector is competitive enough so that deposit rates are high enough to compensate poor savers as well as the less poor with financial savings when the currency collapses due to state failure.

It is one market that is working efficiently against the massive state failure that is the central bank and its flexible exchange rate and call money rate targeting and flexible inflation targeting.

To compensate for its state failure, the central bank has hit depositors with price controls. Borrowers are now to get a subsidy, and banks are going to be hit with price controls. Not a single banker lifted a finger to stop deposit controls. In fact, they made a pact with the devil.

Now let them sell their soul.

All of this will not take the country anywhere. A Nixon shock is a state failure. Currency collapse is state failure. Sri Lanka’s chronic high interest rates are a state failure. Even China had high interest rates before the 1993 peg. Then rates plummeted.

The structurally high rates are a direct result of monetary instability. Banks are working to save the people from state failure.

This columnist, as well as other observers, had assumed that the central bank was withdrawing liquidity at 7.70 percent above the 7.50 floor rate, out of an abundance of caution.

The August debacle, where money was injected recklessly, shows that there was no such prudence at all. The CB was mindlessly targeting the call money rate it seems, going by media reports. There is no point in talking about monetary reform if large volumes of money are printed to generate liquidity spikes.

Criminal Actions

In Sri Lanka someone who counterfeits a 100 rupee note is take to court. But the central bank can print massive amounts of money with impunity.

Will criminal punishments work? In an earlier age, those who generated monetary instability and high inflation with large volumes of printed money were guillotined or beheaded.

No such gruesome punishments are needed. But some type of accountability is a must.

The other aspect is that politicians are being blamed for errors coming from targeting short or long term rates with printed money.

People will kick out politicians, and they will pay the price, regardless of whether they do or do not pressure the central bank to print money. In Argentina a President who had a relatively small deficit lost the election.

But soft-pegged central bankers have continued to commit the same errors all over the world. They do the same in Turkey, in Russia, in Nigeria, In Argentina and in Iran.

Actions which caused the most significant damage in recent years which have to outlawed or criminalised are as follows.

1. The buffer strategy (repaying long term bonds with central bank re-financed lender of last resort money injected to state banks).

2. Soros-style swaps. The damage is less if the dollars in reserves and they can be sold to mop up the liquidity – as long as the liquidity has not been borrowed already and used for imports. Then the cash short has to be filled with new money. In the final analysis is it is the same as printing money through a reverse repo transaction.

3. Filling liquidity shortages after giving dollars for maturing 2013 swaps without allowing rates to hit the ceiling rate. A maturing swap is a capital outflow. Overnight rates have to rise after swap matures depending on the size (see above).

4. Injecting cash after going without sterilising dollar purchases for more than 2 weeks. This is what happened in August 2019.

5. Operation twist (a two-leg operation that contributed to the 2015/2016 BOP crisis where long term rates are manipulated)

6. Floating without taking away excess liquidity and allowing rates to move up to the ceiling policy rate. This happens all the time under the deadly ‘flexible exchange rate’. It is not necessary to have large shorts. About 5 or 10 billion rupees is enough. The critical outcome is for rates to move up quickly and then come back down. Prolonged liquidity shortages trigger output shocks

7. Cover-up moves to delay rate hikes. Nixon shock style import controls, gold taxes are covering up for call money rate targeting or other policy errors and delaying corrections.

The following central bank actions cause less damage, but they should also be restricted or some penalties set.

1. Going for more than 2 weeks without sterilising inflows.
2. Going for more than 4 weeks with sterilising inflows – double the punishment for two weeks.
3. T-bill window dressing, like that seen in August.

The 50 billion rupee liquidity bubbles that led to sharp downward pressure on the rupee in 2018 indicate that strict limits must be brought against excess liquidity to keep domestic operations on a tight leash.

A limit must be placed to stop excess liquidity from exceeding 2 percent of the monetary base. If the central bank is willing to allow short term rates (call money and repo) to move up and is ready to defend the rupee with the same enthusiasm that it buys dollars to prevent appreciation, then higher volumes of excess liquidity could be tolerated.

It now turns out that most of these individual wrong policies have been undertaken to target the call money rate.

All this problems with contradictory central bank policies will become much more critical next year when private credit picks up on top of expanding state spending.

https://economynext.com/sri-lankas-killer-flexible-exchange-rate-strikes-again-bellwether-30162/

[The Invisible]

Sri Lanka national inflation hits 5.6-pct in October

ECONOMYNEXT – Sri Lanka’s nationwide inflation hit an almost two-year high of 5.6 percent in October 2019, according to central bank data.

The National Consumer Price Index compiled by the Census and Statistics Department had risen 5.0 percent in September and 3.4 percent in August 2019.

The NCPI last rose over five percent 20 months ago, when it hit 5.4 percent in January 2018

The rise in the National Consumer Price Index in October was owing to the monthly increases of prices of food, a statement said.

Year-on-year food inflation increased to 7.3 per cent in October 2019 from 4.9 per cent in September 2019 while non-food inflation was 4.3 per cent, continuing its decreasing trend observed since May 2019, the statement said.

(COLOMBO, 21 November 2019)

[nihal123Top contributor]

ශ්‍රී ලංකාවේ නව ජනපති හා ආණ්ඩුවට ඇති ආර්ථික අභියෝග: "2015ට පෙර ගත් ණය ගෙවන්න සිදුවන වසර 5ක්"

ශ්‍රී ලංකාවේ 7 වන විධායක ජනාධිපති ධූරයට පත්වූ ගෝඨාභය රාජපක්ෂ සහ අලුතින් පිහිටුවන රජයට ඉදිරියේදී ආර්ථික අභියෝග රැසකට මුහුණ දීමට සිදුවනු ඇතැයි ස්වාධීන ආර්ථික විශ්ලේෂකයෙකු වන ශ්‍රී ලංකා මහ බැංකුවේ හිටපු නියෝජ්‍ය අධිපති ඩබ්. ඒ. විජේවර්ධන පවසයි.

ඔහු පෙන්වා දෙන්නේ 2015 වසරට පෙර ලබාගත් ණය, ඉදිරි වසර පහ තුළදී ගෙවීමට සිදුවීම ඉන් ප්‍රධාන අභියෝගයක් බවය.

ඉදිරි වසර පහේ ආර්ථික අභියෝග සම්බන්ධයෙන් කළ විමසීමකදී බීබීසී සිංහල සේවය සමග අදහස් දක්වමින් ඩබ්. ඒ. විජේවර්ධන ප්‍රකාශ කළේ, පසුගිය වසර 10ක කාලය තුළ ලබා ගත් ස්වෛරීත්ව බැදුම්කර යටතේ ලබා ගත් ණය මුදල් රැසකට ආපසු පියවීම සදහා දී තිබූ සහන කාල සීමාව ඉදිරි වසර 5 තුළදී අවසන් වන බවය.

වාර්ෂික ණය වාරික මුදල් ඉහළ යාම
ස්වෛරීත්ව බැඳුම්කර යටතේ ලබා ගත් ණය මුදල් රැසකට ආපසු පියවීම සදහා දී තිබූ සහන කාල සීමාව ඉකුත් වීමත් සමග එම ණය ආපසු ගෙවීමට සිදුවන හෙයින්, ශ්‍රී ලංකා රජය පියවිය යුතු වාර්ෂික ණය වාරික මුදල් ප්‍රමාණය අතිශයින් ඉහළ යනු ඇති බවට ඔහු අනතුරු අඟවයි.

2025 වසරට පෙර සහන කාලය ඉකුත් වන ස්වෛරීත්ව බැඳුම්කර යටතේ ලබා ගත් ණය 2010 වසරේ සිට 2015 වසර දක්වා පැවති මහින්ද රාජපක්ෂ ප්‍රමුඛ රජය යටතේ ලබා ගත් ඒවා වේ.

මේ අනුව, ශ්‍රී ලංකා ඉතිහාසයේ මෙතෙක් වාර්තා වන වැඩි ම ණය වාරික මුදල් ගෙවීමට සිදුවනු ඇත්තේ, ඉදිරි වසර 5ක කාලය තුළය.

"ආණ්ඩුවේ ණය විතරක් බිලියන 3ට වඩා වාර්ෂිකව ගෙවන්න වෙනවා. ඊට අමතරව පෞද්ගලික අංශයේ ණයත් තිබෙනවා," ශ්‍රී ලංකා මහ බැංකුවේ හිටපු නියෝජ්‍ය අධිපති ඩබ්. ඒ. විජේවර්ධන පැවසීය.

"වසර අවසානයේ සමස්ත ණය ප්‍රමාණය මේ වෙනකොට ඇමෙරිකානු ඩොලර් බිලියන 55ට වඩා වැඩියි. ආණ්ඩුව ගත් ණය ප්‍රමාණය ඇමෙරිකානු ඩොලර් බිලියන 34ට වැඩියි. ඒ වගේ ම පෞද්ගලික අංශය විදෙස් ණය ලබාගෙන තියෙනවා ඩොලර් බිලියන 21කට වඩා වැඩියෙන්."

මධ්‍යම රජය දේශීය සහ විදේශීය වශයෙන් ලබා ගත් නොපියවූ ණය ප්‍රමාණ වාර්ෂිකව පහත ප්‍රස්ථාරයෙන් දැක්වේ.

"මහ බැංකුවේ ඩොලර් නෑ"
"ගොඩක් අය දන්නේ ආණ්ඩුව ගත්ත ණය විතරක් රජයට බලපානවා කියලයි. ඒත් ඒක නෙවේ ඇත්ත. පෞද්ගලික අංශය ගත්ත විදෙස් ණය ගෙවන්න ඒ ආයතනවලට රුපියල් තියෙනවා. ඒත් රුපියල්වලින් විදෙස් ණය ගෙවන්න බෑ. ඒවාට ඇමෙරිකානු ඩොලර් ඕන. ඒත් මහ බැංකුවට ණය ගෙවන්න අවශ්‍ය ඩොලර් ප්‍රමාණය නෑ. ආණ්ඩුවට රුපියලුත් නෑ, ඩොලරුත් නෑ."


සංචාරයකයින්ගේ පැමිණීම අඩුවීම, අපනයනය අඩුවීම, ආනයන වැඩිවීම, රුපියලේ අගය පහත වැටීම නිසා විදෙස්ගත ශ්‍රමිකයින් ශ්‍රී ලංකාවට එවන ඇමෙරිකානු ඩොලර් ප්‍රමාණය අඩුවීම ආදී කරුණු හේතුවෙන් ශ්‍රී ලංකා මහ බැංකුව සතු ඩොලර් සංචිත ප්‍රමාණවත් නොවන බව ආර්ථික විශ්ලේෂකයෝ පෙන්වා දෙති.

මේ අනුව, ණය වාරික පියවීමට අවශ්‍ය ඩොලර් ලබා ගැනීමට නම් යළි විදේශ ණය ලබා ගැනීමට හෝ විදේශ ආධාර ලබා ගැනීමට සිදුවනු ඇත.

"විදේශ රටවලින් ශ්‍රී ලංකාවට එන එක ඩොලරයක් පවා ගෝඨාභය රාජපක්ෂට දැන් වැදගත්. ඒ නිසා ඔහුට තීරණය කරන්න වෙනවා ඒ ඩොලර් කොහොම ද ගෙන්න ගන්නේ කියලා. චීනයෙන් ගත්තොත් ලොකු පොළියක් මත තමයි ණය ගන්න වෙන්නේ," ඩබ්. ඒ. විජේවර්ධන පැවසීය.

MCC ගිවිසුම
මිලේනියම් චැලෙන්ජ් ගිවිසුම හරහා නැවත අය කර ගනු නොලබන ආධාරයක් ලෙස ශ්‍රී ලංකාවට ඇමෙරිකානු ඩොලර් මිලියන 480ක් සැපයීමට නියමිතය.


මෙම ආධාරය මෙම අවස්ථාවේ ශ්‍රී ලංකාවට ලබා ගැනීම අතිශය වැදගත් බව ඩබ්. ඒ. විජේවර්ධන පෙන්වා දෙයි. මෙම ගිවිසුම හරහා ශ්‍රී ලංකා මහ බැංකුවට පළමු වාරිකයේදී අවම වශයෙන් ඇමෙරිකානු ඩොලර් මිලියන 100ක් ලැබෙනු ඇත. ණය වාරික පියවීම සදහා එම ඩොලර් භාවිත කිරීමට රජයට අවස්ථාව හිමි වේ.

කෙසේ වෙතත්, ජනාධිපති ගෝඨාභය රාජපක්ෂ වෙනුවෙන් පෙනී සිටි විමල් වීරවංශ, උදය ගම්මන්පිල වැනි දේශපාලනඥයෝ මෙම ගිවිසුම "ඇමෙරිකානු මර උගුලක්" ලෙස හඳුන්වමින් ඔවුන්ගේ ජනාධිපතිවරණ ප්‍රචාරක ව්‍යාපාරයේ ප්‍රමුඛ මාතෘකාවක් ලෙස භාවිත කළහ.


මේ සම්බන්ධයෙන් බීබීසී සිංහල සේවය කළ විමසුමකදී පාර්ලිමේන්තු මන්ත්‍රී නීතිඥ උදය ගම්මන්පිල ප්‍රකාශ කළේ, නව අග්‍රාමාත්‍යවරයෙකු සහ කැබිනට් මණ්ඩලය පත් කිරීමෙන් පසුව කැබිනට් මණ්ඩලය විසින් ඒ සම්බන්ධයෙන් තීන්දුවක් ගනු ඇති බවය.

කෙසේ වෙතත්, "මේ අවස්ථාවේ රටට වැදගත් වන MCC ගිවිසුම දෙසැම්බර් නත්තල් නිවාඩුවට පෙර පාර්ලිමේන්තුවේ සම්මත කර නොගතහොත් ඇමෙරිකානු ඩොලර් මිලියන 480ක් ශ්‍රී ලංකාවට අහිමි වනු ඇතැයි," ඩබ්. ඒ. විජේවර්ධන අනතුරු අගවයි.

මෙම ආධාරය ලබා දීමට මූලික වන අවශ්‍යතාවක් වන්නේ, රටක ඒක පුද්ගල ආදායම ඇමෙරිකානු ඩොලර් 4085ට වඩා අඩු වීමය.

"මේ ආධාරය අපට හම්බ වුණේ 2016 දී කරපු ඉල්ලීමකට අනුව. ඒ කාලේ අපේ රටේ ඒක පුද්ගල ආදායම ඇමෙරිකානු ඩොලර් 4085ට වඩා අඩුවෙන් තිබුණේ. දැන් ඊට වඩා වැඩියි. ඒ නිසා මේ ගිවිසුමට දෙසැම්බර් 31ට කලින් අත්සන් නොකළොත් ආයේ ඒක අපිට ලැබෙන්නේ නෑ. ඇමෙරිකාවේ රජයේ ආයතන දෙසැම්බර් අග සති දෙකේ වහනවා නත්තල් නිවාඩුවට. ඒ නිසා දෙසැම්බර් 15 වෙනි දාටවත් කලින් මේ ගිවිසුමට පාර්ලිමේන්තුවේ අනුමැතිය ගන්න වෙනවා."

ප්‍රතිපත්ති ප්‍රකාශනයේ පොරොන්දු ඉටු කිරීම
ජනාධිපතිවරණය වෙනුවෙන් ගෝඨාභය රාජපක්ෂ සිය ප්‍රතිපත්ති ප්‍රකාශනය හරහා ආර්ථිකමය බලපෑමක් සහිත පොරොන්දු රැසක් ලබා දුන්නේය.

රාජ්‍ය සහ පෞද්ගලික අංශයේ රැකියා නියුතුවූවන්ගේ වැටුපෙන් අඩු කෙරෙන 'PAYE tax' අහෝසි කිරීම
අ.පො.ස. උසස් පෙළ විභාගය සමත් වන සියලු සිසුන්ට විශ්වවිද්‍යාල අධ්‍යාපනය ලබා දීම
උසස් පෙළ අසමතුන්ට නොමිලේ තාක්ෂණික අධ්‍යාපනය ලබා දීම
නොමිලේ පොහොර ලබා දීම
ක්ෂුද්‍ර ණය මුළුමනින් ම කපා හැරීම
රුපියලේ අගය ස්ථාවර මට්ටමක පවත්වා ගෙන යාම
කර්මාන්තපුර, නිදහස් වෙළෙඳ කලාප සහ නිදහස් වරාය 50ක් පිහිටුවීම
ඉහත සදහන් වන්නේ ශ්‍රී ලංකාවේ ආර්ථිකයට ඍජුව බලපාන පොරොන්දු කිහිපයක් පමණි.

මෙම පොරොන්දු ඉටු කිරීම ශ්‍රී ලංකාවේ දැනට පවතින ආර්ථික මට්ටම අනුව විශාල අභියෝගයක් වනු ඇතැයි ස්වාධීන ආර්ථික විශ්ලේෂක ඩබ්.ඒ. විජේවර්ධන පවසයි.

කෙටි කාලීන විසඳුම්
ජනාධිපති ගෝඨාභය රාජපක්ෂ හමුවේ ඇති මෙම ආර්ථික අභියෝග ජය ගැනීම සඳහා කෙටි කාලීන මෙන් ම දීර්ඝ කාලීන විසඳුම් සෙවිය යුතුය.

ආර්ථික විශ්ලේෂක ඩබ්.ඒ. විජේවර්ධන පෙන්වා දෙන්නේ, ශ්‍රී ලංකාව ආර්ථිකමය වශයෙන් අර්බුදකාරී තත්ත්වයන්ට මුහුණ දුන් සෑම අවස්ථාවකදී ම අසල්වැසි ඉන්දියාව ඉදිරිපත් වූ බවය.

"ඒ නිසා ඉන්දියාව සමග මිත්‍රශීලීත්වය ආරක්ෂා කර ගැනීම ඉතා ම වැදගත්. යුද්ධය වෙලාවෙදිත් ජාත්‍යන්තර මූල්‍ය අරමුදලට බලපෑම් කරල අපට මුදල් අරන් දුන්නේ ඉන්දියාව. ඒ වගේ ම නව ජනාධිපතිවරයාට ඉන්දියාව නොවැම්බර් 29 වෙනි දා එන්න කියල කරල තියෙන ආරාධනාව නිසි පරිදි අපි පාවිච්චි කළ යුතුයි. අඩු තරමින් ඩොලර් බිලියන 2ක්වත් ඉන්දියාවෙන් ගන්න උත්සහ කරන්න ඕන."


ඉන්දියාවෙන් මුදල් ආධාරවලට අමතරව එරට පවතින තාක්ෂණික දැනුම ශ්‍රී ලංකාවට රැගෙන ඒම සදහා ඉන්දියාවේ පිහිටි සුපිරි තාක්ෂණික විශ්වවිද්‍යාල පද්ධතියේ ශාඛාවක් ශ්‍රී ලංකාවේ ස්ථාපනය කිරීමට කටයුතු කළ යුතු බව ඩබ්.ඒ. විජේවර්ධනගේ අදහසය.


එමෙන් ම MCC ගිවිසුම හරහා ලැබීමට නියමිත ඇමෙරිකානු ඩොලර් මිලියන 480 ලබා ගැනීම ද කෙටි කාලීන වශයෙන් ඉතා වැදගත් බව ඔහු පෙන්වා දුන්නේය.

මේ අතර, රජරට විශ්වවිද්‍යාලයේ ආර්ථික විද්‍යා මහාචාර්ය ගීතානි කුමාරි බුලංකුලම බීබීසී සිංහල සේවය සමග පැවසුවේ, දීර්ඝ කාලීන වශයෙන් රටක ආර්ථික අභියෝග ජය ගැනීම සදහා නිෂ්පාදන ආර්ථිකයක් ගොඩ නැගිය යුතු බවය.

"අපේ රට සේවා පදනම් කර ගත්ත ආර්ථිකයක් තියෙන්නේ. නිෂ්පාදන සියල්ල ආනයනය කරන්න වෙලා. ඒකෙන් සිද්ධ වෙන්නේ, රටට ගලා එන ඩොලර් ප්‍රමාණය අඩු වෙනවා. සේවා ආර්ථිකය වෙනුවට නිෂ්පාදන ආර්ථිකයක් ගොඩ නැගුවොත් ශ්‍රී ලංකාවේ ආර්ථිකය ශක්තිමත් කරන්න පුළුවන්. නැත්නම් රුපියලේ අගය අවප්‍රමාණය වීම වළක්වගන්න බෑ."

https://www.bbc.com/sinhala/sri-lanka-50499642

[nihal123Top contributor]

Fitch ණය ශ්‍රේණිගත කිරීමේ ආයතනයේ ප්‍රකාශයට මහ බැංකුවේ දැඩි විරෝධය
November, 22, 2019

2019 නොවැම්බර් මස 21 වන දින ෆිච් ණය ශ්‍රේණිගත කිරීමේ ආයතනය “ශ්‍රී ලංකාවේ මැතිවරණ ප්‍රතිඵලය මගින් ප්‍රතිපත්ති අවිනිශ්චිතතා වැඩි කරයි” (Sri Lanka Election Result Increases Policy Uncertainty”) යන තේමාව යටතේ නිකුත් කරනු ලැබූ ප්‍රකාශයට ශ්‍රී ලංකා මහ බැංකුව දැඩිව විරෝධය පළ කරනු ලබයි. එමගින්, ජනාධිපතිවරණයේ ප්‍රතිඵල සහ අතිගරු ජනාධිපතිතුමා විසින් රාජකාරි භාර ගැනීම හා දැනට සිදු කෙරෙමින් පවත්නා ප්‍රධාන පත්වීම් පිළිබඳව වෙළඳපොළෙන් පෙන්නුම් කරන ලද ධනාත්මක ප්‍රතිචාරයට සහමුලින්ම ප්‍රතිවිරුද්ධ තත්ත්වයක් නිරූපණය කෙරෙයි.

දේශීය විදේශ විනිමය වෙළඳපොළ මෙන්ම ණය සහ කොටස් වෙළඳපොළ ද මේ වනවිට මැතිවරණ ප්‍රතිඵලය පිළිබඳව ධනාත්මක ප්‍රතිචාර දක්වා ඇත. මැතිවරණය අවසාන වීමේ සිට ගත වූ දින හතර තුළ ශ්‍රී ලංකා රුපියල එ.ජ. ඩොලරයට සාපේක්ෂව රුපියලකට අධික ප්‍රමාණයකින් අතිප්‍රමාණය වී ඇත. මෙම කාලය තුළ, ඉදිරි විනිමය වෙළඳපොලේ අධිමිලෙහි (Forward Permia) ශීඝ්‍ර පහළ යෑමක් පෙන්වූ අතර එමගින් රුපියල තවදුරටත් අතිප්‍රමාණය වීමේ අපේක්ෂා ඉහළ නැංවීය. 2019 නොවැම්බර් මස 20 වන දින පැවැත්වූ භාණ්ඩාගාර බිල්පත් වෙන්දේසියේ දී රජයේ සුරැකුම්පත් වෙළඳපොළෙහි ප්‍රාථමික වෙළඳපොළ ඵලදා අනුපාතික ශීඝ්‍ර ලෙස පහළ වැටුණු අතර ද්විතියීක වෙළඳපොළ ඵලදා අනුපාතික ද සමස්තයක් ලෙස සැලකිය යුතු ලෙස අඩු විය. මේ අතර, මෙම සතිය ආරම්භයේ සිට ජාත්‍යන්තර ස්වෛරීත්ව බැඳුම්කරවල ඵලදා අනුපාතික ක්‍රමවත්ව හැසිරී ඇත. විදේශීය ආයෝජකයින් විසින් ශ්‍රී ලංකා රුපියල්වලින් නාමනය කරන ලද රජයේ සුරැකුම්පත්වල සැලකිය යුතු ප්‍රමාණයක අරමුදල් අඛණ්ඩව ආයෝජනය කර ඇත. තවද, කොළඹ කොටස් වෙළඳපො‍ළේ සමස්ත කොටස් මිල දර්ශකය පසුගිය දින කිහිපය තුළ දී සැලකිය යුතු ලෙස ඉහළ ගොස් ඇත. මෙම ධනාත්මක වෙළඳපොළ ප්‍රවණතා නොසලකා හැරීම ෆිච් ණය ශ්‍රේණිගත කිරීමේ ආයතනය විසින් නිකුත් කළ ප්‍රකාශයේ දැකිය හැකි ප්‍රධාන දෝෂයකි.

නව රජය තවමත් ස්ථාපිත කෙරෙමින් පවතින බැවින් එහි නිශ්චිත ප්‍රතිපත්ති දිශානතිය සහ ඒ මගින් ඇති විය හැකි ප්‍රතිඵල පිළිබඳව කිසිදු විශ්ලේෂකයකු විසින් අදහස් පළ කිරීම සඳහා ඉක්මන් වැඩි බව මහ බැංකුවේ මතය වේ. දේශපාලනික අවිනිශ්චිතතා පහව යෑම තුළින් ඉහත සඳහන් කරන ලද ධනාත්මක වෙළඳපොළ තත්ත්වයන් ඉදිරි කාලපරිච්ඡේදය තුළ දී තවදුරටත් ශක්තිමත් වීමේ ඉහළ හැකියාවක් පවතී. රජය විසින් මේ දක්වා හඳුන්වා දෙන ලද මූලික ක්‍රියාමාර්ග තුළින් නව පරිපාලනය තුළ වෘත්තීමය සහ ශක්තිමත් පාලන ව්‍යුහයක් පවත්වාගෙන යෑම සඳහා වන අතිගරු ජනාධිපතිතුමාගේ අධිෂ්ඨානය දැකිය හැකිය.

මේ අනුව, දුර්වල උපකල්පන මත පදනම්ව ෆිච් ණය ශ්‍රේණිගත කිරීමේ ආයතනය විසින් නිකුත් කරන ලද ප්‍රකාශයේ අන්තර්ගතය සත්‍ය වෙළඳපොළ වර්ධනයන් හා අපේක්ෂා සමඟ කිසිසේත්ම නොගැලපෙන බැවින් එය අනුමත කළ නොහැකිය.

[ruwan326]

PickMe to list on CSE next year

Chairman Ajit Gunewardene says new economy businesses hold great potential in Sri Lanka
In FY19 completes fourth capital raising since inception and valued company at pre-money valuation of Rs. 12 b equivalent to some of top 45 listed firms on CSE

Given the future growth trajectory of the company and improved prospects for the Colombo Bourse, the popular ride hailing app PickMe is firming up plans to go public next year.

“We are working towards a listing on the CSE within the next six to 12 months,” PickMe Founder Chairman Ajit Gunewardene told the Daily FT.

He noted that the implementation of amended listing rules will help fast-track the listing of the company on the CSE.

Plans for a 2020 listing is supported by the impressive growth of PickMe, whose owning company is Digital Mobility Solutions Ltd., as well as the future potential.

In FY19, the company concluded its fourth capital raise since inception and valued the company at a pre-money valuation of Rs. 12 billion.

“This would rank us amongst the top 45 companies listed on the Colombo Stock Exchange,” noted Gunewardene, who himself was a former Chairman of the Colombo Bourse.

“To achieve this value after three years of operation is creditable and we are acutely aware of our responsibility to continue to create long-term sustainability, growth and profitability to ensure we maintain this momentum,” he added.

The World Bank’s private sector investment arm International Finance Corporation (IFC) participated in PickMe’s fourth capital raise worth Rs. 700 million. All other investors in PickMe’s cap table also joined in.

In the company’s FY 2019 Annual Report released recently, Chairman Gunewardene said that investment in what one may term new economy businesses holds “great potential in Sri Lanka”. “We are well positioned to lead the way in this space given our balance sheet as well as the technological expertise that we have built up within the company,” he added.

Despite setbacks following the Easter Sunday tragedy, Gunewardene said the PickMe business model has significant potential over the long term.

In the immediate aftermath of the Easter Sunday tragedy, like all businesses, PickMe too was negatively impacted. “The main impact was as a result of the almost complete shutdown of economic activity in general and the booming tourism industry in particular. The multiplier effect of this industry is significant and has a direct correlation to the utilisation of ride hailing services. We now see a gradual improvement and we are confident this trend will continue for the rest of the year,” Gunewardene said.

He expressed the belief that PickMe is still only at the tip of the iceberg of opportunity in its business. “It is our view that we can and will be the change agent of the business landscape in Sri Lanka. We are confident that the new economy is one that will grow exponentially, and we will be a significant part of it. We have all the tools in terms of human and financial resources to execute this strategy,” he added.

According to him PickMe’s advantage is that it doesn’t have the legacy baggage of most old economy companies. “We don’t have to transition into a technology company. We are a technology company. This is our DNA,” Gunewardene emphasised.

Though the company is operating in a competitive landscape with a multinational giant, Gunewardene expressed the confidence that PickMe can battle them on all fronts by localising service with world-class technology to win.

“We don’t believe in asking policymakers for protection. All we ask for is a level playing field and an enabling environment. Sri Lanka has a penchant for regulations but lacks the wealth for State investment beyond basics. This is our opportunity,” he said.

“Through technology we democratise information and competition thus improving affordability and levelling the playing field. This creates easy access to markets and drives more users and hence more business to our partners. We create the network effect,” the Chairman added.

He said that an integral part of PickMe’s operating model is innovation that boosts productivity for its partners. This in fact is the formula required to create a competitive environment that will support a growth framework for Sri Lanka.

http://www.ft.lk/front-page/PickMe-to-list-on-CSE-next-year/44-690313

[share1]

Good work Ruwan.

[The Invisible]

Sri Lanka needs monetary discipline to avoid further downgrades: Bellwether



ECONOMYNEXT – Sri Lanka will face credit downgrades and possible sovereign default of dollar debt unless the highly unstable discretionary ‘flexible exchange rate’ is restrained and some monetary discipline is brought in.

Next year will be a critical year as budget deficits are set to expand and the credit system will also go through a cyclical recovery, leading to an expansion in private credit.

Sri Lanka is a country that had mostly kept monetary stability in the worst years of the war with the help of the ideology then prevailing.

But now each new episode of monetary indiscipline is costing the country one notch in the rating scale.

Sri Lanka will soon run out of rating space to tap capital markets if the flexible exchange rate/call money rate targeting continues in the next recovery space.

2020 Sri Lanka is not 2005

When Sri Lanka got its credit rating from Fitch in 2005 it was BB-. That was two notches below investment grade.

Sri Lanka’s downgrades have generally come in the wake of monetary indiscipline.

In 2008, there were external factors also involved and fuel subsidies and global collapse but monetary policy was for all intents and purposes ‘leaning against the wind’.

Monetary Downgrades



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All downgrades since then (including 2018) have come amid an economic recovery because of balance of payments crises triggered by interest rate targeting by and sterilizing forex interventions or both.

Money printing has worsened in recent years due to a more Keynesian interventionism creeping into the central bank and highly discretionary ‘flexible’ policies being adopted, with the approval of the International Monetary Fund.

If money printing is tracked as the stock of central bank credit to government and liquidity injections to the banking system, it can be seen how monetary instability triggered rating cuts in the past.

This is because rating agencies do not downgrade just because the deficit spikes in a single year.

They may even high levels of debt and sit out a period of low growth as long as there are no forex troubles from a soft-peg.

The first downgrade from BB- to B+ was followed by an upgrade in 2011. The upgrade happened just before another BOP crisis was triggered by liquidity injections.

Fitch stayed put during that crisis but S&P cut the outlook to negative. Because the rupee was allowed to appreciate after the previous crisis, many foreign investors also stayed put.

When money was printed in 2015 to flush markets with excess money and push down rates, and the crisis worsened in 2016, the rating was cut to B+.

Following the experience of the 2012 crisis, where the exchange was kept at 130 to the US dollar without appreciating, foreign investors fled.

When the economy was barely recovering from that crisis in the first quarter of 2018 money was again printed by the central bank to target rates and another crisis was triggered, generating two busts in a row.

In December 2018, the rating was downgraded to B.

A BB rating is generally called speculative. B is highly speculative.


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Barely Above Distress

The next downgrade will take Sri Lanka to B-. Sri Lanka will probably be able to access credit markets even at that rating.



Pakistan, whose central bank also prints money with a peg, and frequently runs to the IMF now has a B- rating.

But B- is barely above CCC.

From two levels below investment grade in 2005, Sri Lanka is now a little above CCC, which is a distressed debt level.

It is not a place to take monetary risks in particular.

The same tricks that were done 10 or 15 years ago cannot be done now.









Sri Lanka Lanka’s foreign debt is now much greater than before.

The numbers are also not certain, because many state enterprises have borrowed directly, and not through on-lending like in earlier years.

Chinese debt have at least built some infrastructure, the sovereign bonds have built nothing much.

Recovery

There will be a recovery in 2020 as the credit contraction from the 2018 currency crisis ends.

It should be noted that in 2018, the central bank’s monetary indiscipline triggered an economic downturn without any fiscal major fiscal indiscipline.

But 2020 will be like 2015, there will be a spike in spending. Any tax cuts will also dampen a recovery in revenues.

While it brings benefits when income taxes are cut, indirect tax cuts will not help.

There will be a stock market and an economic recovery.

The central bank and others are talking about the need to get down interest rates. That is not re-asssuring.

It is doubtful whether China will give loans like earlier to boost growth as it is having its own troubles. China’s flexible exchange rate is taking a toll, as are state owned enterprises. However China may give debt relief to Sri Lanka.

Rating Space

If rates are cut further and money is printed, the recovery in 2020 will be short-lived or not at all, and another currency crisis will be generated and downgrades will follow.

In 2018, rating agencies were more jittery than usual.

When growth is weak for long periods, there is a tendency for rating agencies to be jittery.

The economic fallout from the 2018 currency crisis in Sri Lanka is similar to that of India’s currency collapse.

The difference between India and South America is that Latin American countries end up in sovereign default due to their exposure to debt markets and weak ratings.

Unlike Argentina, Sri Lanka’s central bank got away with lower inflation due to tight liquidity after the crisis began, at the expense of a smaller output shock, like the better managed countries during the East Asian crisis.

If there was more excess liquidity an Indonesia or Argentina style meltdown may have occurred.

However the advantage was not utilized to appreciate the currency during the credit downturn.

The proposed central bank reforms will not help, as it will be more of the same monetary indiscipline with ‘flexible’ exchange rate and ‘flexible inflation targeting.

Argentina also had ‘flexible’ inflation targeting at an absurdly high double digit rate. What is the point of having a double digit inflation target?

In any case Sri Lanka no longer has the rating space for either monetary indiscipline or fiscal indiscipline.

Dollarization and Golderization

None of the candidates of the 2019 presidential elections have seriously talked about monetary discipline, though there is some understanding about the dangers of currency depreciation.

If there is no serious monetary discipline that brings stability, all talk of economic programs are meaningless.

When countries have chronic monetary indiscipline which leads to depreciation and high nominal rates, economic players dollarize. There may be deposit dollarization (like NRFC), when the currency falls, and liability dollarization (getting dollar loans) whenever there is some stability in the peg.

In South American countries like Argentina most individuals have dollarized to protect themselves from frequent currency crises, even if the government has not officially dollarized the country.

In Vietnam the currency was collapsing so fast until the 1989 central bank reforms that paved the way to economic growth, that people dollarized their salaries and bought gold, which the state bank of Vietnam calls golderization.

Despite 20 years of relative monetary stability people are still at it and the SBV trying to discourage it.

Its neighbor Cambodia is almost fully dollarized, which has given the country stability.

https://economynext.com/sri-lanka-needs-monetary-discipline-to-avoid-further-downgrades-bellwether-33549/

[NIRMALSG]

News එක කලින් එලියට ඇවිත් ‌වග‌ේ, හ‌ෙ‌ෙට Construction, Banks and Finance වලට ‌හ‌ොද දවසක් ‌ව‌ෙ‌ෙයිි වගේ ‌

බදු සහන රැසකට කැබිනට් අනුමැතිය

ජාතිය ගොඩනැඟීමේ බද්ද,උපයන විට ගෙවීම් බද්ද ඇතුළු බදු රැසක් අහෝසි කිරීමට අද(27) පැවති නව රජයේ ප්‍රථම අමාත්‍ය මණ්ඩල රැස්වීමේදී තීරණය කර තිබේ.

අද පස්වරුවේ පැවති කැබිනට් තීරණ දැනුම් දීමේ ප්‍රවෘත්ති සාකච්ඡාවේදී සම කැබිනට් ප්‍රකාශක අමාත්‍ය බන්දුල ගුණවර්ධන මහතා සඳහන් කළේ ආණ්ඩුව සහන පැකේජයක් ජනතාව වෙත ගෙන ඒමට කටයුතු කර ඇති බවයි.

අද දිනයේ දී ආර්ථික පුනර්ජීවනය සඳහා ජනතාවට මෙම සහන පැකේජය ජනාධිපතිවරයා විසින් ලබා දි ඇතැයි ද අමාත්‍යවරයා මෙහිදී සඳහන් කළේය.

ජනතාවට මේ තුළින් හුස්ම ගැනීමට මෙන්ම ව්‍යවසාකයින්ට නව බලාපොරොත්තු රැසක් සමඟ මෙම යෝජනා සියල්ලට අගමැතිවරයා විසින් අනුමැතිය ලබා දී ඇතැයි ද බන්දුල ගුණවර්ධන මහතා පැවසීය.

මෙම සංශෝධන සඳහා වු ගැසට් නිවේදන හා අණපනත් ඉතා කඩිනමින් සැකසීම ආරම්භ වන බවත් අමාත්‍යවරයා මෙහිදී කියා සිටියේය.

ඒ අනුව, ගෘහස්ථ නිෂ්පාදන සඳහා වු භාණ්ඩ හා සේවා මත අය කළ ජාතිය ගොඩනැඟීමේ බද්ද, ආර්ථික සේවා ගාස්තු, බැංකු හා මූල්‍ය ආයතනවලින් අය කරන හර බද්ද, කොටස් වෙළඳපොළ මත අය කරන ප්‍රාග්ධන බද්ද , උපයන විට ගෙවීම් සඳහා වන ආදායම් බදු, පොලී මත අය කරන විවිධ වාර්ගයේ ඇනවුම් බදු හා ණය සේවා බදු යන සියලු බදු වර්ග වහාම ක්‍රියාත්මක වන පරිදි අහෝසි කිරීමට තීරණය කර තිබේ.

එමෙන්ම සියලු දෙනා ගොඳුරු වෙන වක්‍ර බද්දක් වන සියයට 15ක්ව පැවති වැට් බද්ද සියයට 8 දක්වා අඩු කිරීමට අනුමැතිය හිමි වු බවත් අමාත්‍යවරයා මෙහිදී පැවසීය.

දෙසැම්බර් මස 1 වන දින සිට මෙම බදු සහන ක්‍රියාත්මක වෙයි.

වැට් අය කිරීමේ දී පිරිවැටුම සඳහා වු අගයානුකූල බද්ද මිලියන 1කට තිබූ බවත් එය දෙසැම්බර් 1 වන දා සිට මිලියන 25 කට වැඩි නම් පමණක් වැට් බද්දට යටත් වන බවත් අමාත්‍යවරයා මෙහිදී පැවසීය.

සුළු, මධ්‍ය පරිමාණ හා ඇතැම් විට මහා පරිමාණ ව්‍යාපාර පවා වර්ෂයකට මිලියන 300 ක පිරිවැටුමක් නැති නම් වැට් බදු ගෙවීමට යටත් නොවන බවත් බන්දුල ගුණවර්ධන මහතා කියා සිටියේය.

ඉදිකිරීමේ කේෂ්ත්‍රය සඳහා අය කරන ආදායම් බද්ද සියයට 28 සිට සියයට 14 දක්වා අඩු කර තිබේ.

ස්වාධිපත්‍ය දේපල මහල් නිවාසවල වැට් බද්ද සම්පූර්ණයෙන් අහෝසි කර ඇත.

සියලූම ආගමික ස්ථාන සියලූ බදු වර්ගවලින් නිදහස් කර තිබේ.

විදෙස් රටවලින් උපයාගෙන එන අදායම් සියල්ල බදුවලින් නිදහස් කර ඇත.

විදුලි සංදේශ ගාස්තුවලට අය කරන බද්ද සියයට 25 කින් අඩු කර තිබේ.

[The Invisible]

Sri Lanka replaces VAT, NBT with 8-pct tax, ESC, debit tax removed: Bandula

ECONOMYNEXT – Sri Lanka’s cabinet had approved a cut of value added tax to 8 percent from 15, removed withholding tax on interest, a debit tax and halved income tax on construction companies, Cabinet spokesman Minister Bandula Gunewardene said.

A 2 percent Nation Building Tax on domestic goods and services would also be removed.

A capital gains tax on stocks, a debt tax on financial institutions and debt service tax had also been removed.

The turnover based tax would be effective from December 01, Gunewardene said. Income tax change may take effect later, he said.

The Pay As You Earn deduction from wages had also been removed, he said.

Both PAYE and ESC are advance collection on income taxes.

Thresholds on some taxes including VAT have been raised.

An existing telecommunication tax would be cut by 25 percent. Inward remittances would be freed from taxes, he said.

Co-cabinet spokesman Ramesh Pathirana said import taxes on a range of imports will be lifted. These could include tea and rubber.

[The Invisible]

Sri Lanka tax cuts to boost economy, 5-pct of GDP deficit in 2020: Treasury Secretary



ECONOMYNEXT – Sri Lanka’s economic activity will pick up following a series of the tax cuts and the expansion of economic activity will boost revenues and keep the deficit down in 2020, Treasury Secretary Sajith Attygalle said.

The government will also control non-essential expenditures in 2020, to keep the deficit down.

“Initially there would be a revenue dip,” Attygalle said. “We will prioritize expenditure and maintain the deficit around 5 percent of GDP in 2020.”

Sri Lanka’s economic growth dropped to 1.6 percent in the second quarter of 2019 down from 3.9 percent in 2018, from the effect of a currency collapse in 2018, which was worsened by a hit on tourism from Easter Sunday attacks.

The budget deficit expanded to 4.4 percent by July and was expected to expand to as much as 5.6 percent by the year end.

Sri Lanka’s cabinet has approved a value added tax of 15 percent to be cut to 8 percent, removed a nation building tax on domestic sales and replace it with a 8 percent tax, Minister Bandula Gunewardene said.

Attygalle said the new tax would have input credit.

The revenue drop from value added tax would not be 1 to 1 as there were other taxes in the economy he said.

The tax cuts would boost margins and profits of most companies, and retail prices may also come down in the case of companies where VAT and NBT was invoiced to final customers, analysts said.

Where retail prices fall, disposable incomes of consumers go up. Many firms with imported inputs have had their margins hit on the currency collapse in 2018.



See Also


Sri Lanka stocks surge 1.6-pct after tax cuts



Sri Lanka tax cuts to boost growth amid concerns: report



Nivard Cabraal appointed senior advisor to Sri Lanka PM



US economy grew faster in Q3, but trade woes continue



Sri Lank rupee ends firmer, gilt yields steady



 
 
 

         






Gunewardene said the turnover tax cuts would be effective from December 01.

Sri Lanka cabinet has approved a series of tax cuts including the removal of the economic service charge for companies and pay as you earn taxes for employees, which are advanced collections on income taxes.

A debit tax and debt service charge on banks would also be removed, Gunewardene said. There will be a threshold of 250,000 rupees on pay as you earn tax for salaried workers. (Colombo/Nov28/2019)

[The Invisible]

Sri Lanka tax cuts to boost growth amid concerns: report

ECONOMYNEXT – A host of tax cuts by Sri Lanka’s new government will provide an immediate boost to economic growth and corporate profits but are damaging in the long term given big budget deficits, a new research report said.

Bartleet Religare Securities said the tax cuts will spur consumption with the effective increase in disposable incomes benefitting consumption sector stocks.

Sri Lanka’s government headed by newly elected president Gotabaya Rajapaksa announced the tax cuts after the first meeting of its cabinet of ministers.

Valued added tax (VAT) was almost halved to eight percent from the current 15 percent.

“The estimated VAT income for the state coffers, calculated at 15% is about 530 billion rupees for 2019,” Bartleet Religare Securities said.

The new government also announced reduced PAYE (pay as you earn) tax, and agricultural and telecommunication taxes.

“This we believe would provide an immediate impetus to consumption and would add a short term injection to GDP growth,” BRS said in an analysis of the tax cuts.

“However for the long term macro health of the economy, this would be visibly injurious,” they said.

“Sri Lanka has long struggled with twin deficits and more notably so with revenue / GDP. We saw the post-2016 VAT increase, this gap closing, although it came at the expense of consumption led growth.”

BRS said other tax cuts in addition to the reduction of VAT, could improve profits of listed firms exposed to sectors like consumption, banking and insurance, construction, tourism, agriculture and information technology.


“The saving in disposable income means that consumption sector stocks will stand the most to benefit going by how the reversals in 2016 affected the sector performance.”
(COLOMBO, 28 November 2019)

[nihal123Top contributor]

කොටස් වෙළෙඳපොළෙන් රු. බිලියන 2.78 ක පිරිවැටුමක්. සියලු කොටස් 1.34%කින් ඉහළට
November, 28, 2019

කොළඹ කොටස් වෙළෙඳපොළ සියලු කොටස් මිල දර්ශකය අද (28) දින ගනුදෙනු අවසානයේ දී ඒකක 6,201.12 ක් ලෙසින් වාර්තා විය. මෙය පෙර දිනයට සාපේක්ෂව ඒකක 82.25ක හෙවත් 1.34%ක ඉහළ යාමකි.

මේ අතර අද දින රුපියල් බිලියන 2.78 ක ගනුදෙනු පිරිවැටුමක් වාර්තා වූ අතර එහිදී දේශීය ආයෝජකයින්ගේ සක්‍රීය සහභාගීත්වය තවදුරටත් පිළිබිඹු කරමින් රුපියල් බිලියන 2.41 ක් දේශීය මිල දී ගැනීම් වශයෙන් සටහන්ව තිබුණි. එහිදී විදේශීය මිල දී ගැනීම් වාර්තා වූයේ රුපියල් මිලියන 373 ක් ලෙසිනි.

අද දින දේශීය විකිණුම් රු. බිලියන 1.58 ක් හා විදේශීය විකිණුම් රු. බිලියන 1.19 ක් ලෙසින් වාර්තා විය.

අද දින ඒකක 6,201.12 ක් ලෙසින් සටහන් වූ සියලු කොටස් මිල දර්ශක අගය මෙම වසර තුළ වාර්තා වූ ඉහළම සියලු කොටස් මිල දර්ශක වටිනාකම ලෙසින් දැක්විය හැකිය.

නව රජය බලයට පත්වීමෙන් පසු සුවිශේෂී බදු සහන රැසක් මේ වන විට ප්‍රකාශයට පත් කර ඇති අතර මෙයින් බදු වර්ග රැසක් සංශෝධන ව්‍යාපාරික සමාගම්වලට සෘජුව බලපාන ඒවා වේ. විශේෂයෙන්ම වැට් බදු අනුපාතිකය 8% ක් දක්වා පහත හෙළීම, ජාතිය ගොඩනැගීමේ බදු ඉවත් කිරීම, වැට් බදු සඳහා අදාළ වන ආයතනික පිරිවැටුම වර්ෂයකට රුපියල් මිලියන 300 ක් දක්වා ඉහළ දැමීම, විදුලිසංදේශ බදු 25%කින් පහළ දැමීම වැනි දෑ සමාගම්වල බදු බර අඩු කර ලාභදායීත්වය ඉහළ නැංවීමට සෘජුව උපකාරී වනු ඇත.

අද දින සියලු කොටස් මිල දර්ශකයේ ඉහළ යෑම සඳමා ජෝන් කීල්ස් හෝල්ඩිංග්ස්, ලංකා දුම්කොළ සමාගම, ඩයලොග්, ඩිංස්ටිලරීස් සහ නෙස්ලේ යන සමාගම් වැඩි දායකත්වයක් දෙන ලදී.



කොළඹ කොටස් වෙළෙඳපොළේ ලැයිස්තුගත සමාගම් 289 න් 264 කම කොටස්, අද දින ගනුදෙනු වී තිබුණි.

[The Invisible]

Sri Lanka PAYE tax to be abolished, uniform personal income tax on all earnings



ECONOMYNEXT – Sri Lanka is abolishing Pay As You Earn (PAYE) on salaries and withholding tax on interest up to 250,000 rupees a month, but income tax has to be paid on total incomes above 250,000 rupees a month, Minister Bandula Gunewardene said.

Personal income tax will start at a monthly income of 250,000 rupees on all incomes at 6 percent. The 250,000 rupees of income will be charged 6 percent, the 250,000 rupees 12 percent, and the next 250,000 18 percent, he said.

“This will benefit a large number of state and private sector workers at executive and management level and doctors,” Gunewardene said.

“The highest rate would be 18 percent.”

Until 2015, the highest personal income tax rate was 16 percent, but under a International Monetary Fund backed program the last administration brought back a strongly progressive tax, with the highest rate at 24 percent.

All kinds of niggling withholding taxes were also brought on interest and royalties, at a heavy political cost, but whose total revenue potential was unknown.

Withholding tax on interest would only be charged over 250,000 rupees a month.

However income tax would be charged on all incomes above 250,000 rupees, Gunewardene said.

Under PAYE tax and withholding tax, which are effectively replacements of income tax, individuals can avoid the hassle of filing income tax returns, and the government also gets cashflow steadily spread out through the year.

It is not clear when the new income taxes would be legislated. Income taxes are usually applicable for year starting April.



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Sri Lanka is also cutting value added tax from 15 to 8 percent, which would be effective from December 01, Gunewardene said.
(Colombo/Nov28/2019)

[The Invisible]

Sri Lanka’s central bank holds rates watching tax cuts, budget deficit



ECONOMYNEXT – Sri Lanka is holding policy rates at current levels, amid a widening the budget deficit so far this year and recent tax cuts announced to stimulate economic activity, which need clarity, the central bank said.

“…[R]ecent tax revisions would support lower inflation and higher economic growth in the short term, but was of the view that greater clarity with regard to the medium term fiscal path of the government is required to assess the impact on the economy over the medium term,” the central bank said in it November monetary policy review.

Sri Lanka’s cabinet of ministers had announced a cut in value added tax from 15 to 8 percent and while a non-recoverable 2 percent tax on domestic goods and services will be dropped from December 01.

Other cuts have also been announced for personal income tax, a debit tax on financial transactions, a debt service levy on banks, removal of taxes from information technology, for which a date has not been set.

Officials have said a revival in economic activities would boost tax revenues eventually keeping the deficit at 5 percent of gross domestic product in 2020, while spending will be slashed.

You may also read

Sri Lanka tax cuts to boost economy, 5-pct of GDP deficit in 2020: Treasury Secretary

Sri Lanka to slash spending, push up non-tax revenues: Bandula

The central bank said there was a slight increase in deposit rates after price controls were lifted, but it still expected lending rates to fall further.

“Specifically, the Average Weighted Prime Lending Rate (AWPR) is expected to reduce by a further 70 basis points to 9.50 per cent by end 2019, while the Average Weighted Lending Rate (AWLR) is projected to decline by around 120 basis points to below 12.50 per cent by March 2020,” the central bank said.



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“Interest rates on the stock of deposits continued to decline, while interest rates on new deposits, which declined notably until September 2019, showed some increase in the month of October 2019, following the removal of the cap on deposit interest rates of licensed banks.”

The central bank said private credit grew 26 billion rupees in October, state enterprises borrowed 34 billion rupees and credit to central government was flat.

The central bank is holding is policy rate at which printed money is injected to the market at 8.0 percent and the rate at which excess liquidity is removed at 7.0 percent.

However it can inject large volumes of excess liquidity at any time to keep overnight rates below 8.0 percent, especially when private or state domestic credit picks up.

The injections tend to de-stabilize a highly non-credible peg with the US dollar, which is labelled a ‘flexible exchange rate’.

Sri Lanka’s tax revenues were hit and private credit slowed in 2019, after the flexible exchange rate collapsed in 2018 as liquidity injections were made to target a call money rate, generating an output shock, worsening the deficit and pushing up bad loans, analysts have said.

Growth fell to 1.6 percent as suicide attacks on Easter Sunday added to the effects of the currency collapse.

“Economic growth is predicted to be modest during the remainder of the year, with likely subpar growth in Industry and Services activities as implied by leading indicators,” the central bank said.

“However, improved investor confidence, supported by political stability and fiscal stimulus driven boost to aggregate demand, is expected to drive short term growth.

“The introduction of an appropriate policy mix, which utilises the available limited policy space prudently, would support the economy to reach as well as enhance its potential over the medium term.”

Inflation is expected to be around 4-6 percent, the central bank said.

[subash]

Thanks

[The Invisible]

Sri Lanka’s 12-month inflation slows to 4.4-pct in November

Sunday December 1, 2019 07:34:41

ECONOMYNEXT – Sri Lanka’s 12-month inflation rose 4.4 percent in the 12- month to November, dropping from 5.3 percent a month earlier, data from the state statistics office showed.

Prices increased 0.3 percent in the month with the Colombo Consumer Price Index rising to 131.7 points from 131.3 points.

The 12-month inflation dropped due to the base effects. The index jumped 1.3 percent in November 2018.

Sri Lanka’s inflation has been picking up in 2019, after a collapse of the currency in 2017.

In the calendar year 2018, inflation was 2.8 percent. Prices have risen 4.0 percent so far this year.(Colombo/Nov30/2019)

[The Invisible]

Sri Lanka budget deficit to reach 7-pct of GDP in 2019: Finance Ministry



ECONOMYNEXT – Sri Lanka’s budget deficit could reach 7 percent of gross domestic product in 2019, the finance ministry said, with revenues falling after the latest collapse of the island’s highly unstable soft-pegged exchange rate regime.

“The expected fiscal deficit for 2019 will be more than the estimated and could settle around 7 percent of GDP, due to both a significant dip in revenue than expected mainly due to slow growth and increase in election related spending,” the finance ministry said in a statement.

‘..[T]he Sri Lankan economy has recorded a less than 2 percent growth in GDP together with rising inflation outlook.”

Analysts had warned that the contradictory dual anchor regime in backed by an International Monetary Fund deal with a 8 percent inflation ceiling (domestic anchor) and foreign reserve target (involving pegging or an external anchor called a ‘flexible exchange rate’), would generate monetary instability and stagflation.

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Sri Lanka’s newly elected regime has announced a series of tax cuts including cutting value added tax from 15 percent to 8 percent, to boost economic activity. Income tax of construction firms will be halved to 14 percent from 28 percent.

The tax free threshold for personal income tax would be raised to 250,000 from 100,000 rupees a month.



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The finance ministry said the tax cuts would be followed by expenditure cuts and state enterprise reform.

Cabinet ministers had been cut, and non-priority expenditures have been restricted.

“Ministries, Departments, state enterprises and other institutions…must…control their expenditures, including managing the staff, establishment costs, restricting vehicle purchases, building and office spaces and undue year end purchases,” the finance ministry said.

“..[T]he low growth in credit and monetary aggregates along with underperforming economy, there is leeway to provide a substantial fiscal and credit stimulus to increase aggregate demand in the economy,: the statement said.
“Hence this is timely as it stimulates economic activities and ease the tax burden on the general public.

“This will also create a conducive environment for the private sector for their business planning and investment decisions thereby more economic activities will be generated in the short to medium term, boosting economic growth.”

Sri Lanka is expecting to end 2020 with a deficit or 5-pct of GDP an official said.

The tax cuts would also reduce state expenditure, the statement said.

Analysts have observed that private credit usually recovers from the collapse of a currency after about 18 months, if the economy is left undisturbed.

Balance of payments trouble usually comes to Sri Lanka when private credit recovers and liquidity is injected by the central bank to keep interest rates down.

In 2018, two runs on the rupee were triggered with liquidity injections just as the economy was recovering from a currency collapse in 2015/2016.

In 2015, the deficit expanded to 7.6 percent of GDP when a so-called, 100-day stimulus was given and fuel prices were cut, amid a very strong recovery in private credit, from a currency collapse in 2012. (Rupee, Sri Lanka, in trouble after Keynesian stimulus)
Colombo/Dec02/2019)

[The Invisible]

Sri Lanka large caps still undervalued, consumer goods has potential: Asia Securities



ECONOMYNEXT- A rally is Sri Lanka’s stock market in the second half of 2019 has pushed up construction, manufacturing and telecom sectors but, large caps and consumer goods firms, have room to grow, Asia Securities a brokerage said.

“The market rally that took place since May 2019 up to now, some of the sectors that contributed were construction, manufacturing, leisure and telecom; sectors which had a lot of downside over the past two years,” Research Head Kavinda Perera said at an Asia Securities investment forum in Colombo.

“Some of the large cap sectors like banks and conglomerates, are yet to see a significant rerating,” he said.

“This is one of the reasons why we think that the current bull run has a bit more room to run, because the large sectors will start to contribute.”

The main All Share Price Index at the Colombo Stock Exchange fell to a 7-year low of 5,199 by May 15 following the Easter Sunday bombings, to 6,215 on December 02.

Signing of a revised reform program with the International Monetary Fund, the country’s largest fund, the Employees’ Provident Fund re-entering the market with large purchases and the start of an election cycle contributed to gains.

However foreign investors have so far not returned to the market and some have been selling steadily.

Foreign funds will play a key part in the market confidence going forward, Perera said.

With the government fiscal stimulus targeting higher consumer discretionary funds, consumer goods and retail sectors have significant upside, he said.

Government tax reforms have also helped construction sector to repay bad loans that revives the repayment cycle again, he said.



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“The construction sector that was under a lot of stress created a lot of issues for the bank’s recovering slightly in the next year, we can expect the repayment cycles start coming through again.”

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Sri Lanka should be careful not to allow tax cuts to de-stabilize economy: WB economist

Economists and analysts have raised concerns about the tax cuts and whether fiscal stimulus will be monetarily accommodated with rates cuts and liquidity injections which may lead to instability unless carefully managed. (Colombo/ Dec18/ 2019)

[The Invisible]

Sri Lanka’s inflation ends at 4.8-pct in 2019

ECONOMYNEXT- Sri Lanka’s inflation rose to 4.8 percent in the 12-months to December from 4.4 percent in November, with the index rising November with a rise in food prices, the statistics office said.

The Colombo Consumer Price Index grew to 132.4 in December from 131.7 in November.

The food sub index grew 2.4 percent in the month, with several commodities going up, ending the year up 6.3 percent.

Sri Lanka’s central bank has been injecting liquidity into the money market, after a soft-pegged rupee collapsed in 2018, altering the price structure of the island.

Tight liquidity kept prices down initially, but analysts had expected prices to pick up as the credit system gradually recovered.

Commodity prices are also gaining globally with the tightening activities of the Fed coming to an end.

In December Sri Lanka’s newly elected administration has cut taxes and also frozen fuel prices.

However, retailers had maintained prices without drastic increases during and after the currency fall. (Colombo/Dec31/2019)

[NIRMALSG]

Hope this year it will continuously improve business sentiment confident

Business sentiment continues to improve in the aftermath of the presidential poll

The trade deficit contracted in October on the back of lower expenditure on imports and a marginal drop in export earnings. According to the Central Bank of Sri Lanka, a decline in cumulative expenditure on imports and an increase in export inflows resulted in the deficit contracting to US$ 6.5 billion in the first 10 months of 2019 – compared to 8.9 billion dollars during the corresponding period in the previous year.

Additionally, the Central Bank reports that “the drop in tourist arrivals was contained further in October” with tourism earnings amounting to US$ 2.8 billion in the first 10 months of last year – a 20.7 percent decline year on year compared to the same period in 2018. Workers’ remittances also rose to 607 million dollars although cumulatively, this represents a decline.

Foreign activity in the stock market recorded a net outflow of US$ 10 million in October, which is an improvement from the 36 million dollar outflow witnessed in the prior year.

Meanwhile, the country’s gross official reserves stood at 7.8 billion dollars, which accounts for almost five months of imports.

As for the latest LMD-Nielsen Business Confidence Index (BCI), the uptick in confidence following the outcome of the presidential election is both stark and highly encouraging.



THE INDEX The BCI stood at 186 in December – its highest point since September 2015 – recording an increment of 75 basis points from the previous month.

The barometer therefore, is close to being twice as high as its 12 month average (99), more than double its score of a year ago (90) and within striking distance of the BCI’s all-time high of 204 – which incidentally, marked the formation of the previous coalition government in September 2015.

Elaborating on these developments, Nielsen’s Director – Consumer Insights Therica Miyanadeniya explains: “This unprecedented increase has come in the wake of the new president taking the reins and the policies implemented so far.”

She continues: “The tax concessions, reduction of VAT from 15 percent to eight percent, lower government expenditure as well as other visible changes seem to have endeared the new government to both businesspeople and consumers.”

SENSITIVITIES A survey respondent remarks that “with the new government and president, we hope the business climate will get better in the coming months.”

And it is this very sentiment that’s likely to prop up confidence among both businesspeople and investors in the short term at least.

PROJECTIONS The positivity in the lead-up to the presidential poll has seen the BCI steamroll its way to far higher ground in the wake of several business and investor friendly policy initiatives announced by the newly elected president.

But as Miyanadeniya notes, the direction of the index in the coming months will largely depend on developments leading up to the general election, as well as how the corporate sector perceives the caretaker government’s policies.

To hazard an educated guess, it is unlikely that business confidence will wane in the short term.

[nihal123Top contributor]

ණය පොලී අඩු නොකළ බැංකු 8කට මහ බැංකුවෙන් ක්‍රියාමාර්ග
January, 1, 2020

“මෑතකාලීන ප්‍රතිපත්ති තීරණ, රුපියල් ණය සඳහා අදාළ වෙළඳපොළ ණය පොලී අනුපාතික වෙත කාර්යක්ෂමව සම්ප්‍රේෂණය වීම ඉහළ නැංවීම” යන 2019 අංක 02 දරන මුදල් නීති පනතේ නියෝගය අනුව සතිපතා ආර්ථික දර්ශක (Weekly Economic Indicators) ප්‍රකාශනයෙහි 2019 අප්‍රේල් මස 26 වෙනි දින ශ්‍රී ලංකා මහ බැංකුව විසින් ප්‍රකාශයට පත් කරන ලද බලපත්‍රලාභී වාණිජ බැංකුවල සතිපතා බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතික (AWPR) හා සැසඳීමේදී 2019 දෙසැම්බර් මස 27 වන දින වන විට සතිපතා බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතික අවම වශයෙන් පදනම් අංක 250 කින් පහළ දැමිය යුතුවේ. මෙම නියෝගය නිකුත් කළ දින හෝ ඉන් අනතුරුව සිය බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතිකය වාර්ෂිකව සියයට 9.50 දක්වා හෝ ඊට වඩා අඩු කරන ලද බලපත්‍රලාභී වාණිජ බැංකු සඳහා මෙම නියෝගය අදාළ නොවේ.

බලපත්‍රලාභී වාණිජ බැංකු රැසක් ඉහත නියෝගයට අනුකූලව කටයුතු කර ඇති අතර, ඇතැම් බලපත්‍රලාභී වාණිජ බැංකු විසින් නියාමන අවශ්‍යතාව සපුරාලීම සඳහා ඔවුන්ගේ බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතිකය විශේෂයෙන් 2019 දෙසැම්බර් 20 දිනෙන් අවසන් වූ පෙර සතියේ සිට 2019 දෙසැම්බර් 27 දිනෙන් අවසන් වූ සතිය තුළදී විශාල ලෙස අඩු කර ඇති බව ශ්‍රී ලංකා මහ බැංකුව විසින් නිරීක්ෂණය කර ඇත. ඒ අනුව, සතිපතා බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතිකය සමස්තයක් ලෙස 2019 අප්‍රේල් 26 පැවති සියයට 12.24 සිට 2019 දෙසැම්බර් 27 දින වන විට සියයට 9.94 ක් දක්වා පදනම් අංක 230 කින් අඩු විය. මෙය 2016 අප්‍රේල් 29 දිනෙන් පසු බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතිකය තනි අගයක මට්ටම දක්වා පහළ ගිය ප්‍රථම අවස්ථාව වේ.

අදාළ මුදල් නීති පනතේ නියෝගයට අනුව, කිසිදු බලපත්‍රලාභී වාණිජ බැංකුවක් සිය බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතිකය දැනට අඩු කළ මට්ටමට වඩා ඉහළ නොදැමිය යුතු අතර, නියමිත ණය ප්‍රතිමිල කිරීමේ දී අදාළ වෙළෙඳපොළ ණය පොලී අනුපාතික, විශේෂයෙන්ම බරිත සාමාන්‍ය ප්‍රමුඛ ණය අනුපාතිකය හා සම්බන්ධිත ණය පොලී අනුපාතික ඉදිරි කාලයේ දී අඛණ්ඩව අඩු වනු ඇතැයි අපේක්ෂා කෙරේ.

කෙසේ වෙතත්, මහජන බැංකුව, කොමර්ෂල් බෑන්ක් ඔෆ් සිලෝන් පීඑල්සී, ඉන්දියන් ඕවර්සීස් බෑන්ක්, එම්.සී.බී බෑන්ක් ලිමිටඩ්, පබ්ලික් බෑන්ක් බර්හාඩ්, ස්ටෑන්ඩර්ඩ් චාර්ටඩ් බෑන්ක්, අමානා බෑන්ක් පීඑල්සී සහ ඇක්සිස් බෑන්ක් ලිමිටඩ් යන බැංකු 2019 අංක 02 දරන මුදල් නීති පනතේ නියෝගය සමඟ අනුකූල වීමට අපොහොසත් වී ඇති බව නිරීක්ෂණය කරන ලදී. මූල්‍ය පද්ධතිය හරහා මෑතකාලීන ප්‍රතිපත්ති තීරණ කාර්යක්ෂමව සම්ප්‍රේෂණය වීමෙන් පොදු මහජනතාවට අඛණ්ඩ ප්‍රතිලාභ හිමි කර දීම තහවුරු කිරීම සඳහා මෙම බැංකු සම්බන්ධයෙන් මෙන්ම අදාළ මුදල් නීති පනතේ නියෝගයේ සඳහන් අනෙකුත් විධාන සපුරා නොමැති බලපත්‍රලාභී බැංකු සම්බන්ධයෙන් සුදුසු පියවර ගැනීමට ශ්‍රී ලංකා මහ බැංකුව අදහස් කරයි.

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