• RBI Agrees to USD 400 mn SWAP - Boost to Reserves

    The Reserve Bank of India (RBI) has agreed to provide USD 400 mn to the Central Bank of Sri Lanka (CBSL) under its SAARC SWAP facility.

    CBSL has also requested a further bilateral SWAP arrangement of USD 1 billion between the RBI and CBSL which is under consideration.

    The RBI’s very rapid and timely assistance will serve to boost investor confidence by supporting Sri Lanka to maintain an adequate level of external reserves while accommodating outflows related to imports, debt servicing and, if necessary, support for the currency to avoid disorderly adjustment.

    The CBSL acknowledges the very active role played by the Government of India, the Sri Lankan High Commission, in Delhi, and the Indian High Commission, in Colombo, in facilitating these arrangements.

  • External Sector Performance - November 2015

    The trade deficit contracted in November 2015 compared to the corresponding month of 2014 due to the decline in import expenditure at a higher rate than the reduction in export earnings. Tourist earnings continued to increase, but the growth in workers’ remittances moderated. Inflows to the financial account strengthened with the proceeds from the latest International Sovereign Bond of US dollars 1,500 million.

  • Financial Sector Regulators Sign a Memorandum of Understanding for Consolidated Risk-based Supervision

    The Central Bank of Sri Lanka (CBSL) entered into a Memorandum of Understanding (MoU) with the Securities and Exchange Commission of Sri Lanka (SEC) and the Insurance Regulatory Commission of Sri Lanka (IRCSL) on 31 December 2018 at CBSL, to conduct effective consolidated risk-based supervision and for CBSL to be the lead supervisor in this regard.

  • Extension of the Suspension of Business of Perpetual Treasuries Limited

    The Monetary Board of the Central Bank of Sri Lanka, acting in terms of the Regulations made under the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to extend the suspension of Perpetual Treasuries Limited (PTL) from carrying on the business and activities of a Primary Dealer for a period of six months with effect from 4.30 p.m. on 05th January 2019, in order to continue the investigations being conducted by the Central Bank of Sri Lanka.

  • Monetary Policy Review - February 2016

    Broad money (M2b) continued to grow at a high pace, recording a growth of 17.8 per cent (year-on-year) in December 2015 compared to 13.4 per cent in December 2014. The year-on-year growth of credit granted to the private sector by commercial banks accelerated during the year, with a growth of 25.1 per cent in December 2015 in comparison to 8.8 per cent in December 2014. In absolute terms, the expansion in private sector credit during 2015 amounted to Rs. 691.4 billion compared to Rs. 223.9 billion in 2014.

  • Inflation in January 2016

    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, decreased to -0.7 per cent in January 2016 from 4.2 per cent in December 2015, on year-on-year basis mainly due to the higher base of the corresponding period in 2015. Annual average NCPI inflation decreased to 2.9 per cent in January 2016 from 3.8 per cent recorded in December 2015.

  • Road Map 2019 - Monetary and Financial Sector Policies for 2019 and Beyond

    The Sri Lankan economy faced heightened challenges in 2018, emanating mainly from the global economic, financial and geo-political developments that adversely affected the external sector. There were also several domestic challenges. Political uncertainties, especially during the last quarter of the year, amplified challenges to overall macroeconomic stability. Sub-par economic growth continued in 2018 following subdued growth in 2017. Favourable weather conditions supported a rebound in the agriculture sector while the expansion in services activities has been broad-based.

  • Monetary Policy Review - No. 8 of 2018

    The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 27 December 2018, decided to maintain policy interest rates at their current levels. Accordingly, the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) of the Central Bank will remain at 8.00 per cent and 9.00 per cent, respectively. The Board considered current and expected developments in the domestic economy and the domestic financial markets as well as the global economic environment, with the broad aim of stabilising inflation at mid single digit levels in the medium term to enable the economy to achieve its potential growth.

  • Inflation in November 2018

    Headline inflation as measured by the yearon-year change in the National Consumer Price Index (NCPI, 2013=100) reversed its declining trend, recording 1.0 per cent in November 2018 from 0.1 per cent in October 2018. The increase observed in year-on-year inflation in November 2018 is mainly driven by the increase of the prices of Food items. Year-on-year Food inflation increased to -3.9 per cent in November 2018 from -6.6 per cent in October 2018. However, year-on-year Nonfood inflation decreased from 5.8 per cent in October 2018 to 5.2 per in November 2018.

    The change in the NCPI measured on an annual average basis decreased to 2.7 per cent in November 2018 from 3.3 per cent in October 2018.

  • External Sector Performance - October 2018

    Sri Lanka’s external sector continued to be under pressurein October 2018. The trade deficit widened significantly in October due to a higher growth in import expenditure alongside a marginal growth in exports. However, it is expected that the trend of increasing imports will reduce in the coming months with the lagged impact of recently introduced restrictions on certain import categories. Meanwhile, workers’ remittances recorded a healthy increase in October, while earnings from tourism registered a marginal growth. The financial account witnessed outflows of foreign investments from the government securities market and the Colombo Stock Exchange (CSE).Foreign currency outflows together withimport expenditure exerted pressure on the domestic foreign exchange market.

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