Dr (Ms) Dushni Weerakoon has been appointed as a member of the Monetary Board of the Central Bank of Sri Lanka with effect from July 29, 2019.
Dr (Ms) Dushni Weerakoon is the Executive Director of the Institute of Policy Studies of Sri Lanka (IPS) and Head of its Macroeconomic Policy research. She joined the IPS in 1994 on completing her PhD, and has written and published widely on macroeconomic policy, regional trade integration and international economics.
Electronic payment (e-payment) methods, such as real-time interbank fund transfers from customer current and savings accounts as well as card payment facilities, have provided a great convenience to customers. Sri Lanka’s payment systems and infrastructure meet international security standards to ensure the safety of customer funds. In order to continuously enjoy these facilities customers must adhere to adequate safety measures when making e-payments. Accordingly, customers should exercise caution when sharing any information that can be used to access and use their current or savings accounts, payment cards or electronic wallets (e-wallets).
Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) decreased to 2.1per cent in June 2019 from 3.5per cent in May 2019due to the high base prevailed in the corresponding month of the previous year. Meanwhile, in June 2019, both year-on-year Food and Non-food inflation decreased to -2.9 per cent and6.2 per centfrom -0.4 per cent and 6.7 per cent respectively.
The change in the NCPI measured on an annual average basis remained unchanged at2.0 per cent in June 2019.
The Central Bank of Sri Lanka requested licensed banks and Non-Bank Financial Institutions (NBFIs) to reduce interest rates on deposits with effect from 29 April 2019. This measure was taken to accelerate monetary policy transmission through the financial sector, enabling licensed banks to reduce their interest rates on lending products in general, and to SMEs in particular, and thereby enhance credit flows to the real economy. Accordingly, interest rates on savings and other deposits with tenures less than 3 months offered by licensed banks and NBFIs were based on the Standing Deposit Facility Rate (SDFR) whilst longer tenures were based on the 364 day Treasury bill rate.
The external sector remained relatively stable in May 2019 supported by a contracting trade deficit.
In May 2019, the deficit in the trade account narrowed to US dollars 823 million from US dollars 933 million in May 2018.
The considerable reduction in the trade deficit in May 2019 was due to the decline in import expenditure by 3.9 per cent (year-on-year) and an increase of export earnings by 4.0 per cent (year-on-year).
Earnings from tourism in May recorded a decline of 70.8 per cent (year-on-year), reflecting the impact of Easter Sunday attacks. However, tourist arrivals in June are expected to have recovered with almost a doubling of the number of arrivals in comparison to May 2019.
Manufacturing activities expanded at a higher rate in June 2019, recording an index value of 53.9 which is an increase of 3.2 index points, compared to May 2019. This expansion in manufacturing PMI is mainly attributable to the significant recovery in Employment, especially, in manufacturing of food & beverages and textiles & wearing apparels sectors, from the lower employment availability experienced after the Easter Sunday attacks. Expansion in New Orders and Production, particularly in manufacturing of food and beverages sector, also contributed to the improvement of PMI in June 2019. Many respondents also highlighted that New Orders and Production recovered to a greater extent in June with the normalization of economic activities after the disruptions caused by the Easter Sunday attacks.
The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 11 July 2019, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 7.50 per cent and 8.50 per cent, respectively. The Board arrived at this decision following a careful analysis of current and expected developments in the domestic economy and the financial market as well as the global economy. The decision of the Monetary Board is consistent with the aim of maintaining inflation in the desired 4-6 per cent range while supporting economic growth to reach its potential over the medium term.
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 July 2019, in order to continue the investigations being conducted by the Central Bank of Sri Lanka.
On June 24th, 2019, the Central Bank of Sri Lanka (“CBSL”), on behalf of the Democratic Socialist Republic of Sri Lanka (“Sri Lanka”), returned to the U.S. dollar bond markets, successfully pricing a new issuance of U.S.$500 million 5-year and U.S.$1.5 billion long 10-year Senior Unsecured Fixed Rate Bonds (the “Bonds”) with maturity dates of June 28th, 2024 and March 28th, 2030, respectively. The Bonds have been rated ‘B2’, ‘B’ and ‘B’ by Moody’s Investors Service, Standard and Poor’s and Fitch Ratings, respectively.
The Central Bank of Sri Lanka together with LankaClear (Pvt) Ltd., ( LCPL) achieved a significant milestone in the country’s payment landscape by launching the National Card Scheme (NCS). NCS, will be operated by LCPL in partnership with the international payment card operator JCB International of Japan. Initially, a debit card will be issued under this card scheme. Additionally, the NCS cards will be accepted across over 4,800 ATMs Island wide connected to LankaPay network to facilitate cash withdrawals.
