• Central Investments and Finance PLC - Cancellation of Licence issued under the Finance Business Act No. 42 of 2011 and Certificate of Registration issued under the Finance Leasing Act No. 56 of 2000

    Central Investments and Finance PLC (CIFL), a Licensed Finance Company (LFC) Licensed under the Finance Business Act No. 42 of 2011 (FBA) has been facing severe financial problems over the last four years due to mismanagement and various fraudulent activities taken place in the company. Depositors of the company have failed to withdraw their money over the last four years. All efforts made to revive the company through different strategies have been failed. The continuity of current status will further detrimental to the interest of depositors and other stake holders of the company.

    Therefore, Monetary Board of the Central Bank of Sri Lanka, has decided to cancel the Licence issued to CIFL under the Finance Business Act No. 42 of 2011 (FBA) with effect from 05.03.2018. Accordingly, CIFL is not permitted to engage in Finance Business under the FBA with effect from same date.

  • The Central Bank Responds to Misleading News Reports on Future Interest Rate Movements

    The attention of the Central Bank of Sri Lanka has been drawn to a few recent media reports claiming that the Central Bank is expecting a rise in domestic interest rates in the period ahead. The reasons cited in the said reports for such expectation are a decline in reserves, higher than expected imports and increased interest rates on government securities.

    The Central Bank emphasises that, based on its current projections, an increase in market interest rate is not expected in the near term. The recent movements in headline inflation, core inflation, inflation expectations, broad money growth, credit expansion, expansion in economic activity as well as the international reserve position do not justify the view that a rational market would also expect an increase in interest rates.

  • Central Bank Releases Summary Trading Statistics on Government Securities Secondary Market Information for the First Time

    As a further policy measure to develop the government securities market, the Central Bank from today has commenced releasing summary trading statistics on actual trading of government securities in the secondary market. From August 1, 2016, all primary dealers have been required to undertake inter-primary dealer trades in the trading platform arranged by the Central Bank through the Bloomberg which is a major international financial trading and information electronic platform. Further, all primary dealers will report all outright sales of government securities of value in excess of Rs. 50 mn to investors to this platform within 30 minutes of each transaction.

  • Land Price Index - Second Half of 2017

    The Central Bank of Sri Lanka (CBSL) compiles and analyses several indicators, in order to monitor the developments in the real estate sector. Accordingly, the Land Price Index (LPI) is compiled biannually covering the Colombo District since 1998. In the compilation process of LPI, CBSL uses the land price data collected by the Valuation Department of Sri Lanka covering around 50 centers of five Divisional Secretariat (DS) divisions1 in the Colombo District. In view of the diverse nature of the land use and to maintain homogeneity, three indices for residential, commercial and industrial lands are computed separately. The overall LPI is computed by taking the average of these three sub-indices.

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  • External Sector Performance - December 2017

    Sri Lanka’s external sector performance continued to improve in the month of December 2017, mainly with higher inflows to the Financial Account of the Balance of Payments (BOP). Although earnings from exports increased at a higher rate, the increase in import expenditure resulted in widening the trade deficit in December 2017. Continued inflows by way of tourist earnings and workers’ remittances, however, have contributed in curtailing the expanded trade deficit to a certain extent. Improvement in short-term and long-term capital inflows continued during the month. Reflecting the favourable developments in the external sector, the BOP recorded a surplus of US dollars 2,068 million in 2017, while gross official reserves of the country stood at US dollars 8.0 billion as at end 2017. Meanwhile, the Sri Lankan rupee depreciated by 2.0 per cent during 2017.

  • Inflation in January 2018

    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 5.4 per cent in January 2018 from 7.3 per cent in December 2017, on year-on-year basis. This decline is due to the high base prevailed in January 2017 as well as the monthly decline in Food prices in January 2018.

    The change in the NCPI measured on an annual average basis decreased from 7.7 per cent in December 2017 to 7.6 per cent in January 2018.

  • Sri Lanka Listing in the Financial Action Task Force and Measures Initiated by Sri Lanka to Improve Global AML/CFT Standards

    The Financial Action Task Force (FATF), the global policy setter has introduced 40 recommendations on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in order to combat money laundering/ terrorist financing and other related offences globally.  The Asia Pacific Group on Money Laundering (APG) functions as the FATF’s regional affiliated body and monitors the level of compliance with the FATF recommendations in the region. Sri Lanka is a founding member of APG.  

  • SL Purchasing Managers’ Index Survey - January 2018

    The Manufacturing Sector PMI recorded 51.7 index points in January from 59.1 index points in December 2017. This indicates that the Manufacturing activities expanded at a slower rate in January compared to December 2017 after the seasonal peak observed during last two months of the year 2017. This was mainly driven by the slowdown in the Production and New Orders sub-indices. Further, the Employment sub-index also slowed down during the month as compared to December 2017 while Stock of Purchases subindex contracted during the month. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a slower rate compared to previous month. Overall, all the sub-indices of PMI except from stock of purchases sub-index recorded values above the neutral 50.0 threshold signalling an overall expansion in January 2018.

  • Regulatory Action on a Primary Dealer – Pan Asia Banking Corporation PLC

    The Monetary Board of the Central Bank of Sri Lanka on 14th February 2018, 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 from carrying on the business and activities of a Primary Dealer by Pan Asia Banking Corporation PLC (PABC) for a period of six months with effect from 10.00 a.m. on 15th February 2018, in order to continue the investigations being conducted by the Central Bank of Sri Lanka.

    The Central Bank wishes to emphasize that this regulatory action restricts PABC’s access to the primary auctions for government securities. It does not affect any of the other activities/ services of PABC. 

     

  • Monetary Policy Review - No. 1 of 2018

    Considering the recent developments in the domestic and international macroeconomic environment, the Monetary Board, at its meeting held on 14 February 2018, 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.

    The decision of the Monetary Board is consistent with the objective of maintaining inflation at mid-single digit levels over the medium term and thereby facilitating a sustainable growth trajectory. The rationale underpinning the monetary policy stance is set out below.

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