The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 22 August 2019, decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 50 basis points to 7.00 per cent and 8.00 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, with the aim of further supporting the revival of economic activity in the context of low inflation prevailing at present and the medium term inflation outlook, which is well anchored in the desired 4-6 per cent range.
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The Central Bank of Sri Lanka Reduces its Policy Interest Rates
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Inflation in July 2019
Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) increased marginally to 2.2 per cent in July 2019 from 2.1 per cent in June 2019 due to the monthly increases of prices of items in both Food and Non-food categories. Meanwhile, in July 2019, year-on-year Food and Non-food inflation recorded -2.5 per cent and 6.1 per cent respectively.
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President confers the “Deshamanya” title on Dr. Indrajit Coomaraswamy, Governor of the Central Bank of Sri Lanka
On 19th August 2019, President Maithripala Sirisena conferred “National Honours” on distinguished personalities for the outstanding and invaluable service rendered by them to the Motherland.
Dr. Indrajit Coomaraswamy, Governor of the Central Bank of Sri Lanka along with five other distinguished personalities were conferred the title of “Deshamanya” by the President.
“Deshamanya” is the second-highest national honour awarded by the Government of Sri Lanka as a civil honour. It is awarded in recognition of the exceptional and highly meritorious service to the nation.
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External Sector Performance - June 2019
Sri Lanka’s external sector strengthened further in June 2019 with a marked contraction in the trade deficit while gross official reserves were augmented with the proceeds of the issuances of two international sovereign bonds (ISBs).
In June 2019, the trade deficit narrowed to US dollars 316 million, the lowest since October 2010.
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Release of “Economic and Social Statistics of Sri Lanka – 2019” Publication
The “Economic and Social Statistics of Sri Lanka – 2019” an annual publication of the Central Bank of Sri Lanka, is now available for public access.
This publication contains economic and social indicators of Sri Lanka in the areas of national accounts, agriculture, industry, external trade and finance, government finance, banking and financial institutions, money and capital markets, prices and wages, population and labour force, transportation, education, health, telecommunication services, climate and selected information on economic and social indicators of other countries.
The statistics in this publication have been presented in time series / cross sectional basis to serve the diverse needs of users, such as entrepreneurs, policy makers, researchers, teachers, students and the general public.
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Sri Lanka Purchasing Managers’ Index - July 2019
Manufacturing activities expanded further at a higher ratein July 2019,recordingan index value of 55.7 which is an increase of 1.8 index points, compared to June 2019. This expansion in manufacturing PMI is mainly attributable to the significant increase in New Orders and subsequent increase in Production, especially, in manufacturing of food & beverages sector. The increase in new orders was mainly due to the gradual recovery of the economy from disruptions related to Easter Sunday attacks. Meanwhile, Employment increased at a slower rate during the month of July although many respondents in the textile and apparel industry highlighted that they experienced higher rate of labour turnover during the month.
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Regulatory Action on a Primary Dealer - Pan Asia Banking Corporation PLC
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 business and activities of the Primary Dealer Unit of Pan Asia Banking Corporation PLC (PABC) for a period of six months with effect from 10.00 a.m. on 15th August 2019, 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 suspends PABC’s access to the primary auctions for government securities. It does not affect any of the other activities/services of PABC.
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Appoinment of Dr (Ms) Dushni Weerakoon as a Member of the Monetary Board
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.
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Adopting Safe and Secure Electronic Payment Practices
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).
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Inflation in June 2019
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.