End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.
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IMF Staff Concludes Visit to Sri Lanka to Discuss Progress of Economic Reform Program - September 27, 2018
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Monetary Policy Review - May 2016
The year-on-year growth of broad money (M2b) indicated some deceleration, recording 18.9 per cent in March 2016, compared to 19.8 per cent in February 2016. The expansion in domestic credit remained the key driver of broad money growth, within which credit extended to the private sector by commercial banks recorded a year-on-year growth of 27.7 per cent in March 2016, compared to 26.5 per cent in the previous month. With regard to sectoral distribution of credit, Industry and Services sectors attracted the highest levels of credit disbursements, while personal loans and advances also recorded a substantial increase.
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Opening of Bank Accounts for the Disaster Relief Fund of the Government of Sri Lanka
The Government of Sri Lanka has opened the following bank accounts at Sampath Bank PLC to facilitate collection of donations from both Sri Lankans and foreign philanthropists to provide relief to victims of floods and landslides which occurred in May 2016.
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Inflation in April 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, increased to 4.3 per cent in April 2016 from 2.2 per cent in March 2016, on year-on-year basis. Food and Non Alcoholic Beverages; Alcoholic Beverages and Tobacco; Clothing and Footwear; Furnishings, Household Equipment and Routine Household Maintenance; Heath; Transport; Recreation and Culture; Education; Restaurants and Hotels and Miscellaneous Goods and Services sub categories contributed towards the year-on-year inflation in April.
The change in the NCPI measured on an annual average basis increased to 2.6 per cent in April 2016 from 2.4 per cent recorded in March 2016.
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Release of 'Sri Lanka Socio-Economic Data - 2018' Publication
'Sri Lanka Socio-Economic Data – 2018', the annually published data folder of the Central Bank of Sri Lanka, is now available for public information. The current data folder is the 41st volume of the series.This easy- to- carry data folder contains information categorized under 14 topics, namely, Country Profile; Key Economic Indicators; Country Comparisons; Socio Economic Conditions; Human Resources; National Accounts; Agriculture; Industry; Economic and Social Infrastructure; Prices and Wages; External Trade and Tourism; External Finance; Government Finance; and Money Banking and Finance.
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Inflation in August 2018
Headline 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), decreased to 2.5 per cent in August 2018 from 3.4 per cent in July 2018, on year-on-year basis, mainly driven by monthly decline in Food prices in August 2018. The change in the NCPI measured on an annual average basis decreased from 5.1 per cent in July 2018 to 4.7 per cent in August 2018.
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Date of Announcement of the Monetary Policy Review - No. 6 of 2018
The Monetary Policy Review – No. 6 of 2018, which was previously scheduled to be issued on Friday, 28 September 2018 as announced in the Road Map - Monetary and Financial Sector Policies for 2018 and Beyond, has been rescheduled to Tuesday, 02 October 2018 at 7.30 a.m.
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Margin Deposit Requirement against Letters of Credit (LCs) opened with Commercial Banks for the Importation of Vehicles
The Monetary Board of the Central Bank of Sri Lanka imposed a 100 per cent margin deposit requirement against Letters of Credit opened with the commercial banks for the import of motor vehicles,which are generally used for non-commercial purposes,with immediateeffect.Accordingly, Letters of Credit for the importation of these vehicle categories could be done only with a minimum cash margin of 100 per cent.
The decision to impose the margin deposit requirement is based on recent developments which, if not addressed, could threaten macroeconomic stability. These include the following:
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The Central Bank of Sri Lanka meets the People of Rajarata and Wayamba
An Open Day programme aimed at providing easy access to Central Bank services for school children and people of the Rajarata and Wayamba regions, and creating awareness about Central Bank activities is to be held on 21st and 22nd September 2018 at the Central Bank of Sri Lanka Anuradhapura Regional Office premises and the Public Grounds (Salgado) Anuradhapura.
The programme will be held from 9.00am to 7.00pm and the public will get the opportunity of resolving EPF related issues and obtaining information about small and medium enterprise credit schemes and related services. A currency exchange facility to exchange damaged notes and obtain coins will also take place.
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Clarification on the Erroneous Report regarding Sri Lanka issued by Nomura Holdings Inc.
Several international media sites have recently quoted an analysis by Nomura Holdings Inc., which shows that seven emerging economies including Sri Lanka are at risk of an exchange rate crisis.
The said media sites further quoted the report as saying Sri Lanka’s short term external debt is as high as US dollars 160 billion. As Sri Lanka’s short term external debt is nowhere near this figure, the Central Bank of Sri Lanka requested Nomura to correct the errors in their computations.1
In response, according to Bloomberg, Nomura has “corrected their ‘Damocles’ report to fix Sri Lanka’s short term debt figure to be US dollars 7.5 billion” in an emailed statement to media. Nomura has, however, kept the ‘Damocles score’ for Sri Lanka unchanged.