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Inflation Increased in April 2019

Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100)  increased to 3.6 per cent in April 2019 from 2.9 per cent in March 2019 due to the monthly increases of prices of items in both Food and Non-food categories. Meanwhile, in April 2019, year-on-year Food inflation was -1.2 per cent while Non-food inflation continued its increasing trend for the fourth consecutive month recording a 7.5 per cent in the current month.

The change in the NCPI measured on an annual average basis increased to 1.9 per cent in April 2019 from 1.7 per cent in March 2019. 

Sri Lanka Purchasing Managers’ Index - April 2019

Manufacturing activities contracted recording the all-time low index value of 41.0 in April 2019 with a decline of 25.9 index points from March 2019. The decline of manufacturing PMI is mainly driven by the significant drop in New Orders and Production especially in manufacturing of food, beverages and tobacco and manufacturing of textiles, wearing apparels, leather and related activities products. This decline was mainly due to the New Year holidays in April and the security concerns that arose following the Easter Sunday attack which affected the smooth functioning of factory operations. Most respondents, especially in textile and apparel sector, highlighted that they had to restrict working hours in factories due to security concerns and were unable to achieve the desired production levels.

Regulatory Actions Taken by the Central Bank of Sri Lanka on The Finance Co PLC

The Monetary Board of the Central Bank of Sri Lanka (CBSL) initiated a number of regulatory actions, as temporary measures, under the provisions of FBA, on The Finance Company PLC (TFC) with effect from 15th February 2019, with a view to safeguard the interests of the depositors and other stakeholders of the company. Regulatory measures include suspension of accepting new deposits, withdrawal of deposits and disbursement of loans and advances to facilitate the restructuring process of TFC.

The International Monetary Fund Releases the Sixth Tranche of US Dollars 164.1 Million Under the Extended Fund Facility

The Executive Board of the International Monetary Fund (IMF) completed the Fifth Review under Sri Lanka’s Extended Fund Facility (EFF) approving the disbursement of the sixth tranche amounting to SDR 118.5 million (approximately US dollars 164.1 million). The Executive Board also approved an extension of the arrangement by one year, until June 2020, and rephased the remaining disbursements.