All the sub-indices of PMI Manufacturing recorded values above the neutral 50.0 threshold signalling an overall expansion in October compared to September. The improvement observed in manufacturing activities in October was mainly driven by the improvement in new orders and production, especially in manufacturing of food and beverages activities, led by the positive outlook with the seasonal demand. Even though the employment in the manufacturing of food and beverages activities has improved with seasonal trend, overall employment slowed down. This was mainly evident in manufacturing of textiles, wearing apparels, leather and related activities due to difficulties to find employees in the market.
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Sri Lanka Purchasing Managers’ Index - October 2018
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The Central Bank of Sri Lanka Requests the General Public to be Attentive to Financial Scams/Phishing Emails
The attention of the Central Bank of Sri Lanka (CBSL) has been drawn to recent grievances received from the general public regarding financial scams spreading through phishing emails/ social media messages. CBSL has noticed that the image of the Head Office building, the Logo of CBSL, names of senior officials of CBSL, are being used by scammers and fraudsters to solicit money from the public by disguising such scams as being sent from a trustworthy entity.
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Monetary Policy Review - No. 7 of 2018
The Monetary Board of the Central Bank, at its meeting held on 13 November 2018, decided to reduce the Statutory Reserve Ratio (SRR) applicable on all rupee deposit liabilities of commercial banks by 1.50 percentage points to 6.00 per cent. In order to neutralise the impact of this reduction and maintain its neutral monetary policy stance, the Monetary Board decided to increase the Standing Deposit Facility Rate (SDFR) of the Central Bank by 75 basis points to 8.00 per cent and the Standing Lending Facility Rate (SLFR) of the Central Bank by 50 basis points to 9.00 per cent.
The Board arrived at this decision following a careful analysis of current and expected developments in the domestic and global economy and the domestic financial market, with the broad aim of stabilising inflation at mid single digit levels in the medium term to enable the economy to reach its potential.
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Financial Intelligence Unit of Sri Lanka entered into a Memorandum of Understanding with the Department of Motor Traffic
In terms of the provisions of the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), the Financial Intelligence Unit (FIU) of Sri Lanka entered into a Memorandum of Understanding (MOU) with the Department of Motor Traffic (DMT) on November 01, 2018 at the Central Bank of Sri Lanka to receive intelligence information related to investigations and prosecutions of money laundering, terrorist financing and other related crimes. -
Appointment of New Deputy Governors
The Monetary Board, with the concurrence of the Hon. Minister of Finance, has promoted Assistant Governors, Mr. S R Attygalle and Mr. H A Karunaratne to the post of Deputy Governor of the Central Bank of Sri Lanka (CBSL) with effect from 31st October 2018.
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Erroneous News Articles on Money Printing
The attention of the Central Bank of Sri Lanka (CBSL) has been drawn to recent newspaper articles on increased money printing by the CBSL in the past few days. The CBSL wishes to provide the following clarification as the concepts and facts in such articles remain grossly inaccurate and misleading:
These articles suggest that the CBSL has printed a large amount of money recently to help finance the government’s fiscal commitments. Usually, money printing refers to the expansion of Reserve Money (Monetary Base). Reserve Money, which was at Rs. 939.8 billion at end 2017 and at Rs. 1,010.5 billion at end September 2018, was recorded at Rs. 1,020.8 billion on 2 November 2018. This is a year-on-year growth in Reserve Money of 11.6 per cent, which is well within the CBSL projections for the year.
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Release of “A Step by Step Guide to Doing Business in Sri Lanka”
The eighth edition of “A Step by Step Guide to Doing Business in Sri Lanka”, published by the Central Bank of Sri Lanka, which has been categorized under three main chapters; ‘Starting a Business’, ‘During the Business’ and ‘Other Activities’, contains useful information for the business community, potential entrepreneurs, foreign investors and investment promotion agencies. Under each topic, comprehensive information is provided on relevant institutions, documentary requirements, regulatory clearances and associated costs. The necessary amendments up to mid-2018 gathered from relevant institutions are incorporated into this edition.
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Provincial Gross Domestic Product – 2017
Provincial Gross Domestic Product (PGDP) estimated by the Statistics Department of the Central Bank of Sri Lanka (CBSL) by disaggregating the annual nominal Gross Domestic Product (GDP) figures published by the Department of Census and Statistics (DCS), using provincial indicators, shows that the Western Province continued to account for the largest share of the country’s nominal GDP. However, in line with recent trends, its share in the GDP declined in 2017, contributing to narrowing of regional disparity. Central and North Western provinces were the second and third highest contributors to the national GDP in nominal terms.
During 2017, increases in PGDP shares could be observed in Eastern, North Western and Uva provinces, while that of Western, Southern, North Central and Sabaragamuwa provinces decreased. The shares of Central and Northern provinces remain unchanged.
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International Sovereign Bond Issuances of the Government of Sri Lanka
The Government of Sri Lanka (GOSL) has been issuing International Sovereign Bonds (ISBs) since 2007. GOSL has maintained an unblemished record on servicing of its debt obligations timely, including ISBs, since independence.
ISBs issued in January and April 2014 in United State Dollar (USD) 1,000 million and 500 million, respectively, are due to mature in January and April 2019. The Government has already made pre-funding arrangements for meeting the maturing ISB obligations in 2019 through proceeds of divestment of non-strategic assets and funding through syndicate arrangements.
While exploring an ideal window to further access international capital markets, GOSL and Central Bank of Sri Lanka have already initiated necessary actions to further diversify international market based foreign funding sources to jurisdictions outside conventional Eurodollar ISB issuances.
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Recent Economic Developments: Highlights of 2018 and Prospects for 2019
The Central Bank of Sri Lanka today released its half yearly publication - “Recent Economic Developments: Highlights of 2018 and Prospects for 2019”.
A summary of the performance of the Sri Lankan economy in 2018 as reflected in this publication is given below:
The Sri Lankan economy faced renewed challenges emanating from global market developments, which disrupted the steady stabilisation path observed up to the first quarter of the year. The economy grew at a moderate pace of 3.6 per cent in the first half of 2018, following relatively low growth of 3.3 per cent recorded during the year 2017. Agricultural activities continued their rebound in the first half of 2018 supported by favourable weather conditions that prevailed during this period. The growth in industrial activities slowed, mainly due to the subdued performance in the construction and mining and quarrying subsectors. The expansion in services activities was broad-based, driven mainly by the growth of financial services, wholesale and retail trade and other personal services activities. Meanwhile, an increase in the unemployment rate was observed during the first half of 2018. Consumer price inflation has remained subdued thus far in 2018, although temporarily edging up in some months, mainly as a result of movements in volatile food prices and upward adjustments to domestic petroleum and other administered price.