Purchasing Managers Indices for both Manufacturing and Services activities increased in August 2022.
Manufacturing PMI recorded an index value of 49.6 in August 2022, up from July, yet at slightly below the neutral threshold level.
Services PMI returned to the growth territory in August 2022, recording an index value of 51.7 after declining for four consecutive months.
By virtue of the powers vested under Section 19 (1) read together with Section 19 (2) of the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), financial penalties are imposed on Institutions for non-compliance with the provisions of the FTRA. The penalty may be prescribed taking into consideration the nature and gravity of relevant non- compliance of the Financial Institution.
Accordingly, as Sri Lanka’s regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), the FIU, imposed a penalty as indicated below amounting to Rs. 1.0 million to enforce compliance on Financial Institutions. The money collected as penalties were credited to the Consolidated Fund.
Earnings from exports increased in July 2022, while import expenditure declined for the fifth consecutive month, on a year-on-year basis. The notable decline in import expenditure in July 2022 reflected the impact of overall moderation of activity amidst forex liquidity strains in the banking system, while the policy measures to curtail non-urgent import expenditure also helped to contain import demand pressures. As a result, the trade deficit recorded a notable contraction in July 2022 over the year, thereby easing stresses in the domestic foreign exchange market. Workers’ remittances increased marginally in July 2022, compared to June 2022, and remained in excess of the trade deficit, thereby supporting the forex liquidity conditions under severe balance of payments pressures. Earnings from tourism recorded an increase in July 2022 (year-on-year) on the low base. Foreign investment in the government securities market and the Colombo Stock Exchange (CSE) recorded a marginal net inflow during July 2022. The Central Bank continued to provide forex liquidity to finance essential imports, exhausting the usable level of gross official reserves. Meanwhile, the weighted average spot exchange rate in the interbank market remained around Rs. 361 per US dollar during the month.
IMF staff and the Sri Lankan authorities have reached a staff-level agreement to support Sri Lanka's economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about US$2.9 billion.
The objectives of Sri Lanka’s new Fund-supported program are to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential.
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100) increased to 64.3% in August 2022 from 60.8% in July 2022. This increase in Y-o-Y inflation was mainly driven by the monthly increases of both Food and Non-Food categories. Accordingly, Food inflation (Y-o-Y) increased to 93.7% in August 2022 from 90.9% in July 2022, while Non-Food inflation (Y-o-Y) increased to 50.2% in August 2022 from 46.5% in July 2022.
With the aim of popularizing the LankaRemit National Remittance Mobile Application among migrant workers, the Central Bank of Sri Lanka (CBSL) and the Sri Lanka Bureau of Foreign Employment (SLBFE) held a ceremony on 26 August 2022 at SLBFE to demonstrate its features. LankaRemit provides Sri Lankan expatriates with access to a fast, secure and more convenient remittance channel to send money to Sri Lanka.
CBSL in collaboration with LankaClear (Private) Limited (LCPL) implemented the “LankaRemit” mobile application with the launching of the first phase in February 2022. CBSL is in the process of creating awareness of “LankaRemit” locally and internationally with the support of stakeholders such as the Ministry of Foreign Affairs, Ministry of Labour and Foreign Employment and the SLBFE.
‘Economic and Social Statistics of Sri Lanka – 2022’, an annual publication of the Central Bank of Sri Lanka, is now available for public access.
Statistics Department of the Central Bank of Sri Lanka publishes this booklet, which consists of statistical tables categorised under eight major areas, i.e. ‘National Accounts’, ‘Economic and Social Infrastructure’, ‘Prices, Wages and Employment’, ‘External Trade and Finance’, ‘Government Finance’, ‘Money and Capital Markets’, ‘Financial Sector’ and a section including statistics of other countries. This publication will be a useful collection of information for those who are interested in socio-economic statistics.
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100) increased to 66.7% in July 2022 from 58.9% in June 2022. This increase in Yo-Y inflation was mainly driven by the monthly increases of both Food and Non-Food categories. Accordingly, Food inflation (Y-o-Y) increased to 82.5% in July 2022 from 75.8% in June 2022, while Non-Food inflation (Y-o-Y) increased to 52.4% in July 2022 from 43.6% in June 2022.
Land Valuation Indicator (LVI) for Colombo District increased to 186.9 with a year-on-year change of 17.0 per cent during the first half of 2022. This annual increase (17.0) and the semi-annual increase (4.6 per cent) of LVI, showed a deceleration of the increasing trend observed in the second half of 2021.
All sub-indicators of LVI, namely Residential LVI, Commercial LVI and Industrial LVI contributed to the overall increase. Industrial LVI recorded the highest annual increase of 20.6 per cent, followed by Commercial LVI and Residential LVI.
In order to attract foreign currency held with the public into the banking system, the Minister of Finance has issued an Order granting an amnesty period of 1 month effective from 15.08.2022 for persons in, or resident in, Sri Lanka who hold foreign currency notes in possession to:
i. Deposit into a Personal Foreign Currency Account or into a Business Foreign Currency Account as specified in the Order, as applicable; or
ii. Sell to an Authorized Dealer (Licensed Commercial Bank or National Savings Bank).
