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), remained unchanged from the previous month at 6.3 per cent in July 2017, on year-on-year basis. Both Food and Non-food categories contributed towards the year-on-year inflation in July 2017.
The change in the NCPI measured on an annual average basis increased marginally from 6.1 per cent in June 2017 to 6.2 per cent in July 2017.
The Manufacturing Sector PMI recorded 54.3 in July which is a decrease of 1.8 index points compared to June 2017. This indicates that the manufacturing activities expanded, albeit at a slower rate in July 2017, mainly driven by the decrease in the Stock of purchases sub-index resulting from the usage of excess stock that was built up in the previous month and decrease in the Employment sub-index due to the difficulties in replacing unskilled employees to account for high labour turnover. New orders and Suppliers’ delivery time sub-indices moderated during the month while Production sub-index remained at the same level. However, all the sub-indices of PMI recorded values above the neutral 50.0 threshold signalling an overall expansion in July. Moreover, the Expectation for activities indicates an improvement for the next three months.
In response to the news articles circulating on Total Pay and ICTA, the Central Bank of Sri Lanka (CBSL) wishes to clarify matters to the public and provide an accurate account of events which transpired regarding the National Payment Platform (NPP), in order to deliver a holistic understanding of the prevailing situation.
The Monetary Board of the Central Bank of Sri Lanka on 14th August 2017, acting in terms of the Regulations made under the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to suspend business activities of a Primary Dealer of Pan Asia Banking Corporation PLC (PABC) for a period of six months with effect from 10.00 a.m. on 15th August 2017.
The Central Bank of Sri Lanka has permitted licensed banks to grant concessions to their borrowers who have been affected by the recent floods, adverse weather conditions and connected circumstances with a view to facilitating the recommencement of their businesses and normalization of their activities.
Accordingly, licensed banks can;
The Financial Intelligence Unit of the Central Bank of Sri Lanka (FIU-Sri Lanka) entered into Memoranda of Understanding (MOUs) with the China AML Monitoring and Analysis Centre and Financial Intelligence Unit (FIU) of the Kingdom of Bhutan at the 20th Annual Meeting of the Asia/Pacific Group on Money Laundering (APG), held in Colombo during July 17-21, 2017, to share financial information in facilitating investigation and prosecution of persons suspected of being involved in Money Laundering and Terrorist Financing (ML and TF). Dr H Amarathunga, Director FIU-Sri Lanka signed the MOU with Ms Luo Yubing, Director General, China AML Monitoring and Analysis Centre and Mr Phajo Dorjee, Deputy Governor/Head of FIU, Royal Monetary Authority of Bhutan on behalf of the respective institutions.
The Monetary Board, at its meeting held on 02 August 2017, was of the view that the current monetary policy stance is appropriate and decided to maintain the policy interest rates of the Central Bank of Sri Lanka at their present levels.
In arriving at the above decision, the Monetary Board took into consideration current and expected developments in the domestic and international macroeconomic environment and the need to maintain inflation at mid-single digit levels over the medium term.
Sri Lanka hosted the 20th Annual Meeting of the Asia/Pacific Group on Money Laundering (APG) in Colombo during July 15-21, 2017 with the participation of 408 delegates from 41 member countries of the APG and 24 observers from several international observer organisations. The event was graced by His Excellency the President, Maithripala Sirisena and Hon. Mangala Samaraweera, Minister of Finance and Mass Media.
Sri Lanka’s national commitment in combating money laundering (ML) and financing of terrorism (FT) and other such criminal offences such as corruption and drug trafficking were emphasised by His Excellency the President, Maithripala Sirisena and the Hon. Minister of Finance and Mass Media. The pressing need for strong and effective cooperation among local and international stakeholders was further highlighted by His Excellency the President.
Sri Lanka’s external sector strengthened with significant inflows to the financial account of the balance of payments (BOP) with proceeds from the 11th international sovereign bond (ISB) issuance and a syndicated loan facility in May 2017. These inflows resulted in an increase in gross official reserves from US dollars 5.0 billion as at end April 2017 to US dollars 6.8 billion as at end May 2017. Investor confidence in the Sri Lankan economy continued to be buoyant with continuous inflows to the government securities market and the Colombo Stock Exchange (CSE). However, the current account of the BOP demonstrated a mixed performance during May with a widening of the trade deficit and a moderation in earnings from tourism and workers’ remittances.
The Central Bank of Sri Lanka will introduce a new primary issuance system for Treasury bonds (T-bonds). Effective from July 27, 2017, the new system replaces the existing fully auction based issuance system for T-bonds, that has been in practice since February 2015. The main purpose of introducing the new system is to further enhance the efficiency and transparency of the domestic borrowings of the Government.
The new system is more structured and includes regular monthly T-bond auctions. Each monthly auction offers two T-bond series of different maturities and tenures of the series are expected to match the resource availability in the market.
