The Central Bank of Sri Lanka published its inaugural Monetary Policy Report (MPR) today (31.07.2023).
The publication of the Monetary Policy Report marks an important step towards improving the transparency of monetary policy and is expected to promote engagement with all stakeholders of the economy through the dissemination of information that was considered by the Monetary Board of the Central Bank of Sri Lanka in the formulation of monetary policy decisions.
Export earnings remained above US dollars 1.0 billion for the second consecutive month in June 2023, while import expenditure declined compared to the previous month.
Workers’ remittances and earnings from tourism continued to improve notably in June 2023, compared to the corresponding period of the previous year.
Foreign investment in the government securities market recorded a notable net inflow during June 2023.
The receipt of around US dollars 250 million from the World Bank for the budgetary support, elevated the gross official reserve level (GOR) to around US dollars 3.7 billion by end June, compared to US dollars 3.5 billion as at end May 2023.
The Sri Lanka rupee recorded some degree of volatility against the US dollar in June 2023, reflecting the determination of the exchange rate by market forces.
The Statistics Department of the Central Bank of Sri Lanka (CBSL) commenced PMI survey for Construction activities in June 2017 with a view to timely capture the developments in the construction industry. The department continued the survey for six years delivering key industry insights to the CBSL, assisting the policy formulation process. Currently, the bank disseminates the other two PMI surveys, Manufacturing and Services, on monthly basis to the bank’s website. Hence, the CBSL decided to release the Construction PMI survey results as well for the information of the public starting from the June 2023 survey round.
The report on the Construction PMI survey results for the June 2023 is given below. The survey results will be published on a monthly basis via a press release and uploaded to CBSL website under the Statistics section at the end of the following month hereafter.
Dr. Nandalal Weerasinghe, the Governor of the Central Bank of Sri Lanka in his capacity as the Chairman of the National Coordinating Committee (NCC) on Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT), represented the Sri Lankan delegation to the 2023 Annual Plenary of the Asia Pacific Group on Money Laundering (APG) and the ensuing Technical Assistance and Training (TA&T) Forum held in Vancouver, Canada from 11 – 14 July 2023. The Sri Lankan delegation consisted of the expert assessors participating in the respective Mutual Evaluations of the Peoples’ Democratic Republic of Lao (Lao PDR), Nepal and Brunei.
With a view to assist and maintain the financial system stability by minimizing the pressure on the exchange rate and preserving the foreign currency reserve position of the country, the Hon. Minister of Finance has issued Orders under Section 22 of the Foreign Exchange Act, No. 12 of 2017 (FEA) since 02.04.2020, to temporarily suspend/limit certain outward remittances.
Considering the current and expected developments in the domestic foreign exchange market and with a view to further facilitate international transactions, the Hon. Minister of Finance, with the recommendation of the Monetary Board of the Central Bank of Sri Lanka and the approval of the Cabinet of Ministers, has issued a new Order under Section 22 of the FEA. This Order has relaxed certain limitations on outward remittances for capital transactions and removed the restrictions on current transfers of emigrants, while continuing the other suspensions/limitations which were imposed under the previous Order. The new Order is effective for six (06) months from 28.06.2023. The summary of the suspensions/limitations so relaxed are indicated in Table below.
The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka organized an awareness program for the gem and jewellery sector on “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Compliance Obligations and New Developments” on July 04, 2023. The keynote address was delivered by Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka/Chairman, National Coordinating Committee on AML/CFT, and Mrs. J M Thilaka Jayasundara, Secretary to the Ministry of Industries, Mr. Viraj De Silva, Chairman of the National Gem and Jewellery Authority (NGJA). Mr. Ajward Deen, President of Sri Lanka Gem & Jewellery Association (SLGJA) and Mr. U G Chandrasena, President, Lanka Gem Dealers and Miners Association also graced the occasion. The event was participated by over 100 participants from the industry.
Purchasing Managers Indices indicated an expansion in Services activities and a contraction in Manufacturing activities in June 2023.
Manufacturing PMI recorded an index value of 47.3 in June 2023, indicating the setback in manufacturing activities. This setback was contributed by subdued performance observed in all the sub indices.
Services sector PMI increased further in June 2023 recording an index value of 56.7, the highest reading since January 2022. This was led by the increases observed in New Businesses, Business Activities and Expectations for Activity. Nevertheless, Backlogs of Works continued to decrease, while employment remained unchanged during the month.
The Central Bank has released a pamphlet on ‘Monetary Policy Implementation in Sri Lanka’ in all three languages, with the aim of enhancing awareness of the general public on the role of the Central Bank in the implementation of monetary policy in Sri Lanka. As a part of the broader communication strategy of the Central Bank, this publication presents a simple discussion on the technical aspects of monetary policy implementation, making it accessible to individuals from various backgrounds and providing valuable insights into monetary policy formulation, implementation, monetary instruments and transmission mechanism, while serving to eliminate any misperceptions on monetary operations among the general public.
The Monetary Board of the Central Bank of Sri Lanka has decided not to renew the money changing permits of the 15 MCs listed below for the year 2023, due to the non-compliance with a condition of the permits issued for the year 2022, which was communicated to the respective MCs on 22.02.2023.
The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka organized an awareness program for the real estate sector on “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Compliance Obligations and New Developments” on June 26, 2023. The keynote address was delivered by Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka/Chairman, National Coordinating Committee on AML/CFT, and Mr. W S Sathyananda, Secretary to the Ministry of Urban Development and Housing, Eng. R H Ruvinis, Chairman of the Construction Industry Development Authority (CIDA) and Mr. Hardy Jamaldeen representing the real estate sector also addressed the gathering, while Mr. Sarana Karunaratna, Chairman of the Condominium Management Authority (CMA) also graced the occasion.
