The external sector continued to record a notable improvement so far in 2024 compared to the corresponding period in 2023. The merchandise trade deficit widened in September 2024 (y-o-y), recording the highest monthly trade deficit thus far in 2024.
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External Sector Performance - September 2024
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SL Purchasing Managers’ Index (PMI) for Construction Industry – September 2024
Sri Lanka Purchasing Managers’ Index for Construction (PMI - Construction) indicates a decline in construction activities in September 2024, as reflected by the Total Activity Index, which recorded an index value of 48.6. Many survey respondents observed a slight moderation in construction activities during the month, particularly attributable to the election-related disruptions.
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An Explanatory Note on Central Bank of Sri Lanka's Open Market Operations (OMOs) and Money Printing
There have been recent claims in the media that the Central Bank of Sri Lanka (CBSL) has "printed" Rs. 100 billion on 25 October 2024, through its Open Market Operations (OMOs). It is important to clarify that these claims are not accurate and are baseless. The liquidity (money) injected through OMOs is a routine central banking function aimed at managing adequate liquidity in the banking system for the purpose of stabilizing the short-term interest rates in the economy and ensuring price stability, and hence it should not be grossly misinterpreted as "money printing."
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46th SAARCFINANCE Governors’ Group Meeting
The Central Bank of Sri Lanka, as the chair, hosted the 46th SAARCFINANCE Governors' Group Meeting on 24 October 2024 in Washington D.C. on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group. Attendees included governors, deputy governors, finance secretaries, and other representatives from the central banks and finance ministries of SAARC member states.
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Sri Lanka Purchasing Managers’ Index (Manufacturing and Services) - September 2024
Purchasing Managers’ Indices indicate expansions in both Manufacturing and Services activities in September 2024.
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The Central Bank of Sri Lanka Releases the Financial Stability Review for the Year 2024
In terms of Section 70(1) of the Central Bank of Sri Lanka Act, No. 16 of 2023, the Central Bank of Sri Lanka released its annual Financial Stability Review (FSR) for 2024. This statutory report provides an assessment of the stability of the financial system, identifies and evaluates the associated risks and vulnerabilities, and outlines the policy measures implemented by the Central Bank and other regulatory authorities.
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Strengthening Corporate Governance Practices in Licensed Banks
The Central Bank of Sri Lanka (CBSL) wishes to announce the issuance of the Banking Act Directions No. 05 of 2024 on Corporate Governance for Licensed Banks on 30.09.2024. These Directions were issued with a view to strengthening the corporate governance processes and practices of the licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), thus facilitating the conduct of banking business in a responsible and accountable manner in order to promote safety and soundness of the banking sector and the financial system as a whole.
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CCPI based headline inflation dipped into the negative territory in September 2024
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) entered into negative teritory, recording a deflation of 0.5% in September 2024, for the first time since September 2015.
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External Sector Performance August 2024
The external sector continued the positive momentum in August 2024 with robust inflows of workers' remittances and a notable increase in exports, despite a slowdown in tourist earnings compared to the previous month.
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SL Purchasing Managers’ Index (PMI) for Construction Industry – August 2024
Sri Lanka Purchasing Managers’ Index for Construction (PMI - Construction) expanded at a slower pace in August 2024 over the significantly higher level reached in the previous month, recording an index value of 51.4. Further, most of the other indices were also around the neutral threshold, indicating that the operations of the construction industry broadly remained unchanged compared to the previous month.