Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 56.6 in June 2024, indicating an expansion in manufacturing activities. All the sub-indices, except for employment, remained above the neutral threshold during the month.
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Purchasing Managers’ Indices indicate expansions in both Manufacturing and Services activities in June 2024
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CCPI based headline inflation accelerated in June 2024
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) accelerated to 1.7% in June 2024 from 0.9% in May 2024. This acceleration in the headline inflation is broadly in line with the projections of the Central Bank of Sri Lanka (CBSL). Even with this acceleration, inflation remained well below the inflation target of 5%.
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External Sector Performance - May 2024
In May 2024, the external sector was supported by a narrowed trade deficit, higher inflows to the services account and higher workers’ remittances.
Merchandise trade deficit on Y-o-Y basis narrowed in May 2024, although widened during January-May 2024.
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SL Purchasing Managers’ Index (PMI) for Construction Industry – May 2024
Sri Lanka Purchasing Managers’ Index for Construction (PMI – Construction) recorded an index value of 54.5 in May 2024, indicating an improvement in construction activities. Many construction projects were back on course in May after the extended holidays of the previous month. However, several respondents mentioned that the prevailed adverse weather conditions had dampened the expected improvement.
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Implementation of the Banking (Amendment) Act, No 24 of 2024
The Central Bank of Sri Lanka (CBSL) wishes to announce the implementation of the Banking (Amendment) Act, No. 24 of 2024, effective from 15.06.2024. These amendments were formulated with a view to further strengthening the legal and regulatory framework applicable for licensed commercial banks and licensed specialised banks (licensed banks) to enhance the resilience of the banking sector of Sri Lanka.
The Banking Act, which provides for the introduction and operation of a procedure for the licensing of persons carrying on banking business and for the regulation and control of matters relating to the business of banking, was lastly amended in 2006. Therefore, the recent amendments were formulated considering the developments in the current regulatory framework, economic and market developments, the best practices and international standards adopted on prudential requirements to the context of the local banking sector. In addition, the observations and comments of the relevant stakeholders, viz., the banking sector, Panel of Auditors conducting audits of banks, other regulators and authorities were also considered, as appropriate, when drafting the amendments to the Banking Act.
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Administrative Penalties imposed by the Financial Intelligence Unit (FIU) on Financial Institutions from 01 January 2024 to 30 April 2024
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 collected penalties as indicated below, amounting to Rs. 3 million in total from 01 January 2024 to 30 April 2024 to enforce compliance on Financial Institutions. The money collected as penalties were credited to the Consolidated Fund.
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Appointment of New Deputy Governors of the Central Bank of Sri Lanka
In terms of the provisions in the Central Bank of Sri Lanka Act, No. 16 of 2023, Hon. Minister of Finance, as recommended by the Governing Board, has appointed Mr. A A M Thassim, Assistant Governor and Secretary to the Governing Board, and Mr. J P R Karunaratne, Assistant Governor, as Deputy Governors of the Central Bank of Sri Lanka with effect from 20.06.2024 and 24.06.2024, respectively.
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Financial Intelligence Unit of Sri Lanka entered into a Memorandum of Understanding with the Financial Intelligence National Center of the Kingdom of Bahrain
The Financial Intelligence Unit of Sri Lanka (FIU-Sri Lanka) entered into a Memorandum of Understanding (MOU) with the Financial Intelligence National Center of the Kingdom of Bahrain (FINC-Bahrain) on June 04, 2024, at the 30th Plenary of the Egmont Group, held in Paris, France, to exchange financial intelligence related to money laundering (ML) and associated predicate offences, and in relation to terrorist financing (TF) offence. This MOU has been entered into by the FIU-Sri Lanka, in terms of the provisions of the Financial Transactions Reporting Act, No. 6 of 2006.
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Sri Lanka Purchasing Managers’ Index (Manufacturing and Services) - May 2024
Purchasing Managers’ Indices indicate improvements in both Manufacturing and Services activities in May 2024.
Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 58.2 in May 2024, indicating an expansion in manufacturing activities. All sub-indices, except for employment, rose above the neutral threshold during the month, resulting in an overall increase in the index value.
Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) indicated a slower expansion in services activities in May 2024 as reflected by the Business Activity Index, which recorded an index value of 55.0.
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Financial Intelligence Unit of Sri Lanka entered into a Memorandum of Understanding with the Commission to Investigate Allegations of Bribery or Corruption
The Financial Intelligence Unit (FIU) of Sri Lanka entered into a Memorandum of Understanding (MOU) with the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) to exchange information relating to investigations and prosecutions of money laundering, bribery or corruption, and other related offences.