Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics (DCS), increased to 8.8 per cent in October 2017 from 8.6 per cent in September 2017, on year-on-year basis.
The change in the NCPI measured on an annual average basis increased from 6.8 per cent in September 2017 to 7.1 per cent in October 2017.
According to the Department of Census and Statistics (DCS), the Sri Lankan economy is provisionally estimated to have grown by 2.6 per cent, year-on-year, during the second quarter of 2016 compared to the growth of 7.0 per cent recorded in the same period of 2015. Meanwhile, growth in the first quarter 2016 was revised to 5.2 per cent.
The Manufacturing Sector PMI recorded 54.8 in October which is a decrease of 4.2 index points compared to September 2017. This indicates that the Manufacturing activities expanded at a slower pace in October compared to September 2017. This was mainly driven by the New Orders and Employment sub-indices which moderated from the levels of increase observed in the previous month. The Production and Stock of Purchases sub-indices also expanded at slower rates in October. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a higher rate which was led by lengthening of delivery time of overseas suppliers due to the high demand for their supplies from other countries. Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold signalling an overall expansion in October 2017, but at a slower pace than the previous month.
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 Immigration and Emigration on September 27, 2016 at the Central Bank of Sri Lanka to receive information in order to facilitate investigations and prosecutions on money laundering and terrorist financing. Mr. M. N. Ranasinghe, Controller General, Department of Immigration and Emigration and Mr. H. Amarathunga, Director, FIU signed the MOU on behalf of the respective institutions in the presence of Dr.
There has been widespread coverage in the press and electronic media regarding a report related to the examination of Perpetual Treasuries Ltd conducted by the Central Bank of Sri Lanka as the regulator of Primary Dealers operating in the Government securities market.
The release of this report into the public domain has not been authorized. The Central Bank of Sri Lanka’s internal processes within the Department of Supervision of Non-Bank Financial Institutions have not been completed and the final report has not as yet been submitted to the Monetary Board for its consideration. Arising from this unauthorized disclosure, the Central Bank of Sri Lanka is strengthening its internal control mechanisms and a complaint has also been made to law enforcement authorities to inquire into the unauthorized release of this report.
The Manufacturing Sector PMI was 57.7 in September which is an increase of 4.2 index points from 53.5 in August 2016. The increase in September was fuelled by the improvements observed in New Orders and Production sub-indices. The New Orders and Production sub-indices of manufacturing sector PMI increased compared to the previous month while the Stock of Purchases index remained unchanged. However, the Employment and Suppliers’ Delivery time sub-indices decreased compared to the previous month. Overall data points to an expansion where all the sub-indices apart from Suppliers’ Delivery Time index which is neutral, are above the 50.0 threshold. The expectations for activities indicate an improvement for the next three months.
The Monetary Board, at its special meeting held on Friday, 14th October 2016, considered an interim report on the operations of primary dealers, including their financial performance during the year ended 31st March, 2016 as well as the five month period ended 31st August 2016. It noted with concern the sharp disparity in the performance of primary dealers, as well as certain issues related to the pattern of trading activities. In this connection, the Monetary Board instructed expeditious completion of the ongoing process of preparation of the relevant On-Site Examination Reports. This would enable the Monetary Board to make an early determination on the future course of action.
The external sector performance improved in July 2016 with a reduction of the trade deficit, increased tourist earnings and higher inflows to the financial account. The trade deficit contracted in July, due to the reduction in imports which outweighed the reduction in exports. Tourist earnings increased while workers’ remittances declined during the month compared to the corresponding period of the previous year. Inflows to the financial account strengthened with the proceeds of US dollars 1,500 million from the issuance of the 10th international sovereign bond, US dollars 300 million from the Syndicated Loan facility and net inflows recorded in the government securities market and the Colombo Stock Exchange (CSE), easing the pressure on the Balance of Payments.
As announced to the public on 10.10.2016, the Monetary Board at its meeting held on 14.10.2016 considered resolution issues pertaining to a number of non-bank financial institutions in the context of relevant legal provisions in the interest of protecting the public trust in the financial system. Accordingly, the Monetary Board approved a resolution mechanism for repayment of depositors of three finance companies and legitimate investors in government securities-linked investments in Entrust Securities PLC.
Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics, increased to 4.7 per cent in September 2016 from 4.5 per cent in August 2016, on year-on-year basis. Both Food and Non-food categories contributed towards the year-on-year inflation in September 2016.
The change in the NCPI measured on an annual average basis increased to 3.8 per cent in September 2016 from 3.6 per cent in August 2016.
