The Statistics Department of the Central Bank of Sri Lanka (CBSL) initiated conducting PMI survey for Manufacturing and Services sectors in the country starting from May 2015. The purpose of the survey is to provide purchasing professionals, business decision-makers and economic analysts with a timely set of data to help better understand industry conditions. This survey is conducted monthly by the department and it completed one year cycle in April 2016. Thus, the CBSL decided to release the survey results for the information of the general public. The report on the PMI survey results for May 2016 along with the past series of PMI is given below. The survey results can be accessed via CBSL website under Statistics section which will be updated on monthly basis.
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Purchasing Managers’ Index (PMI) Survey
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A Statement from the Governor of the Central Bank of Sri Lanka
The Governor of the Central Bank of Sri Lanka Mr Arjuna Mahendran informed the Monetary Board at its meeting held on Friday, 24th June, 2016 that he would not be seeking re-appointment as Governor of the Central Bank of Sri Lanka when his term finishes on Thursday, 30th June, 2016 until the Parliamentary Committee on Public Enterprises makes its findings known on issues related to the issuance of Treasury Bonds in the years 2015 and 2016.
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External Sector Performance - March 2016
The external sector performance moderated with an expansion of the trade deficit in March 2016. Earnings from exports declined while imports reduced marginally during the month compared to the previous year. However, during the first quarter of 2016, the trade deficit contracted compared to the corresponding period of 2015 due to the reduction in imports which outweighed the reduction in exports. Tourist earnings and workers’ remittances increased, strengthening the current account of the Balance of Payments (BOP) while inflows to the financial account continued to moderate.
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Inflation in April 2018
Headline 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 1.6 per cent in April 2018, lowest since February 2016, from 2.8 per cent in March 2018 on year-on-year basis. The decline in the year-on-year inflation in April 2018 was mainly driven by the higher base resulted by the increase in prices of the items in the Food category during April 2017. The change in the NCPI measured on an annual average basis decreased from 6.7 per cent in March 2018 to 6.1 per cent in April 2018.
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Democratic Socialist Republic of Sri Lanka USD 1,500 million Dual-Tranche International Sovereign Bond Issuance
The Central Bank of Sri Lanka (“CBSL”), on behalf of the Government of Sri Lanka (Sri Lanka), marked its return to the U.S. dollar bond markets with a successful issuance of U.S.$500 million 5.5-year and U.S.$1.0 billion 10-year International Sovereign Bonds (Bonds) on July 11th, 2016. This marks Sri Lanka‟s 10th US Dollar bond issuance and the first dualtranche offering.
The Bonds have been rated 'B1', „B+‟ and „B+' by Moody's Investors Service, Standard and Poor‟s and Fitch Ratings, respectively. Citigroup, Deutsche Bank, HSBC and Standard Chartered Bank acted as the Joint Lead Managers and Bookrunners of this successful transaction.
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Payment for Deposit Holders of ETI Finance Limited
This is further to the Press Release dated 02.01.2018 relating to ETI Finance Limited (ETIFL) and Swarnamahal Financial Services PLC (SFSP).
The Monetary Board of the Central Bank of Sri Lanka (CBSL), having considered the critical financial conditions of ETIFL and the possible implications to the financial system, decided to permit and facilitate ETIFL to sell its holding of shares in subsidiary and sub-subsidiary companies and investment properties, based on a proposal submitted by the Board of Directors of ETIFL, for a net amount of USD 75 million subject to compliance with the applicable laws and regulations.
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CBSL Determined to Curb Unwarranted Depreciation of the Rupee
The underlying fundamentals do not warrant the current pressure on the Sri Lanka rupee. Gross external reserves are presently at a healthy USD 9.1 bn and the real effective exchange rate indices indicate that the currency is competitive.
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SL Purchasing Managers’ Index - April 2018
The Manufacturing Sector PMI contracted recording an index value of 45.5 in April with a decline of 20.1 index points from March. The new year holidays in April dragged back the manufacturing activities following the peak level of activities observed in the previous month, and was in line with the pattern observed in previous years. The contraction of PMI in April was largely attributable to the contraction in the Production and New Orders sub-indices. Stock of Purchases and Employment sub-indices also decreased during the month. Moreover, lengthening of the Suppliers’ Delivery Time sub-index slowed down during the month which partially indicates that suppliers are less busy. Respondents highlighted that increase in unauthorised absentees following new year holidays disturbed the manufacturing activities.
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External Sector Performance – February 2018
A notable growth in tourist arrivals and continuous net foreign inflows to the stock exchange amidst a significant widening of the trade deficit characterised the external sector performance in February 2018. A surge in gold imports was the primary driver behind the fastest increase in overall merchandise imports in nearly 3-1/2-years, resulting in a further widening of the trade deficit in February 2018. Continuing the growth momentum observed in January 2018, earnings from tourism increased significantly in February 2018. However, workers’ remittances declined in February 2018 following a growth in January. The financial account of the balance of payments (BOP) recorded a net inflow of foreign investments to the stock exchange, helping to counterbalance a net outflow in the government securities market in February 2018.
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The Central Bank of Sri Lanka Maintains Policy Interest Rates Unchanged
The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 10 May 2018, decided to maintain policy interest rates at their current levels. Accordingly, the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) remain at 7.25 per cent and 8.50 per cent, respectively. The Board’s decision aims at stabilising inflation in mid-single digit levels in the medium term, thereby contributing to a favourable growth outlook for the Sri Lankan economy.