The Government of Sri Lanka (GOSL) wishes to express strong displeasure on the recent assessment by Moody’s Investors Service (Moody’s) that led to the rating action, after being placed under review for downgrade three months ago in a similar fashion. Once again, Moody’s irrational rating action with regard to Sri Lanka comes a few days before a key event, namely the announcement of the Government Budget for 2022, and this apparent hastiness and the view expressed during discussions with Moody’s analysts that the nature of the Budget is irrelevant to the financing plans of the Government clearly demonstrates the lack of understanding of such analysts. It also reflects serious governance weaknesses of such agencies, where they systematically overlook the positive developments and expectations in emerging market economies, but attribute much greater weight to downside risks.
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Ill-Timed and Unacceptable Rating Action by Moody’s Renews Concerns of Subjectivity
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Beware of Financial Scams
The Central Bank of Sri Lanka (CBSL) has been receiving information regarding certain Scams where organized parties seem to be claiming that they have large amounts of foreign and/or local currency credited to their accounts which have been temporarily blocked, and that they would pay handsome amounts to any person who can assist in unblocking such amounts. Sometimes they also show forged documentation that large sums of money had been credited to various accounts and they only need to get the approval of the Central Bank to withdraw such monies.
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LANKAQR Nationwide Rollout Campaign
The LANKAQR Nationwide Rollout Campaign was launched on 25th October 2021 at the Central Bank of Sri Lanka (CBSL) with the aim of popularizing LANKAQR payments among small and medium merchants as well as consumers, as the prevalent digital payment method in the country.
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Progress of Securing Foreign Exchange Inflows as announced in the Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability
The Central Bank of Sri Lanka (CBSL) wishes to provide the following information to investors and the general public on the progress made by the CBSL and the Government in securing foreign exchange inflows as announced in the Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability.
The CBSL and the Government have commenced a series of direct engagements with other Governments, Central Banks, financial institutions and investors.
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Meeting between the Governor of the Central Bank of Sri Lanka (CBSL) and Governor of Qatar Central Bank (QCB)
The Governor of the CBSL, Mr. Ajith Nivard Cabraal had discussions with the Governor of QCB, His Excellency Sheikh Abdulla Bin Saoud Al-Thani, regarding CBSL and QCB collaboration to strengthen SL-Qatar economic ties and measures to mitigate the impact of COVID-19 pandemic on the economies. -
NCPI based Inflation decreased in September 2021
Headline inflation, as measured by the year-onyear (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100)1, decreased to 6.2 per cent in September 2021 from 6.7 per cent in August 2021. This decline was entirely due to the statistical effect of the high base prevailed in September 2020. Meanwhile, Food inflation (Y-oY) decreased to 10.0 per cent in September 2021 from 11.1 per cent in August 2021, while NonFood inflation (Y-o-Y) remained unchanged at 3.0 per cent in September 2021.
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External Sector Performance - August 2021
Increased financial inflows bolstered Gross Official Reserves (GOR) during the month of August 2021, while merchandise exports exceeded US dollars 1.0 billion for the third consecutive month. However, the increase of import expenditure outpaced the increase of export earnings, resulting in an expansion of the trade deficit, compared to a year earlier. Tourist arrivals gathered some momentum in August 2021, recording a notable increase over the previous month, although the numbers remained low. A moderation of workers’ remittances was observed in August 2021. Sri Lanka received the allocation of Special Drawing Rights (SDR) from the International Monetary Fund (IMF) as part of the general SDR allocation in 2021. Further, initial disbursements under the bilateral currency swap arrangement between the Central Bank of Sri Lanka and the Bangladesh Bank were received during August 2021.
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Reconstitution of the Monetary Policy Consultative Committee
The Monetary Policy Consultative Committee (MPCC) of the Central Bank of Sri Lanka has been reconstituted with effect from 5 October 2021. The reconstituted MPCC comprises 12 eminent personalities from the private sector and academia and is chaired by Mr. Sunil Lankathilake, Former Deputy Governor of the Central Bank of Sri Lanka and a Member of the Securities and Exchange Commission of Sri Lanka. The other members are Mrs. Dhamitha Cooke, Chief Financial Officer, Stassen Group of Companies; Mr. Niranjan Dissanayake, Chairman, Import Section of the Ceylon Chamber of Commerce; Mr. Christopher Joshua, Managing Director, Access Engineering PLC; Prof. Sunanda Madduma Bandara, Professor of Economics; Mr. Ashroff Omar, Chief Executive Officer, Brandix Lanka Limited; Mr. Ashok Pathirage, Chairman/ Managing Director, Softlogic Group; Mr. Dhammika Perera, Chairman, Vallibel One PLC and Co-Chairman, Hayleys PLC; Mr. Jeyam Perumal, Chairman, Mainettech Lanka (Pvt) Ltd; Dr. Kulatunga Rajapaksa, Emeritus Managing Director, DSI Samson Group; Mr. Rusiripala Tennekone, Retired Senior Banker; and Ms. Kasturi Chellaraja Wilson, Group Chief Executive Officer, Hemas Holdings PLC.
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Sri Lanka Purchasing Managers’ Index - September 2021
Purchasing Managers' Indices for both Manufacturing and Services activities expanded in September 2021.
Manufacturing PMI bounced back to 54.3 in September 2021, increasing by 9.2 index points compared to August 2021.
Services PMI entered the growth territory reporting an index value of 52.2 in September 2021 following the dip observed in August 2021.
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Reconstitution of the Financial System Stability Consultative Committee
The Financial System Stability Consultative Committee (FSSCC) has been reconstituted with eminent personnel in the financial sector with effect from 6th October 2021. Dr. Kenneth de Zilwa; Chairman of the LankaClear (Pvt.) Ltd. is appointed as the Chairperson of the FSSCC. Further, Mr. Niroshan Udage; President of The Finance Houses Association of Sri Lanka, Mr. C N S N Anthony; Director/General Manager of the Credit Information Bureau, Mr. L H A Lakshman Silva; Chairman of the Sri Lanka Banks` Association (Guarantee) Ltd., Mr. Sujeewa Mudalige; Managing Partner of PricewaterhouseCoopers, Mr. Sanjaya Bandara; Vice President of the Institute of Chartered Accountants of Sri Lanka, Mr. Vish Govindasamy; Chairman of The Ceylon Chamber of Commerce, Mr. Kushan de Alwis; President’s Counsel, Mr. Saliya Wickramasuriya; Acting Director General of Colombo Port City Economic Commission, Mr. Kapila Jayawardena; Group Managing Director of LOLC Holdings PLC and Mr. Krishan Balendran; Chairman of John Keells Holdings PLC are members of the reconstituted FSSCC. FSSCC is a high-level committee operational in the Central Bank of Sri Lanka which is established for the purpose of facilitating discussions leading to provide views and advice to assist the Central Bank on formulation of policies on financial system stability and financial sector development. Macroprudential Surveillance Department of the Central Bank of Sri Lanka serves as the Secretariat of the FSSCC.