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.
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Sri Lanka Launches its National Card Scheme
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Inflation in May 2019
Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) decreased to 3.5 per cent in May 2019 from 3.6 per cent in April 2019 due to the high base prevailed in the corresponding month of the previous year. Meanwhile, in May 2019, year-on-year Food and Non-food inflation recorded -0.4 per cent and 6.7 per cent respectively.
The change in the NCPI measured on an annual average basis increased marginally to 2.0 per cent in May 2019 from 1.9 per cent in April 2019.
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The National Launch of the Roadmap for Sustainable Finance in Sri Lanka and a High-Level Seminar for Senior Officers of Financial Institutions and Stakeholders
The Central Bank of Sri Lanka launched the Roadmap for Sustainable Finance in Sri Lanka and hosted a high-level seminar for senior officers of Financial Institutions and Stakeholders on 19 June 2019 at The Atrium of the Central Bank of Sri Lanka, Colombo. This was the National Launch of the Roadmap for Sustainable Finance which was unveiled globally on 10 April 2019 at the Sustainable Banking Network Global Meeting of the International Finance Corporation (IFC) in Washington, D.C, USA. -
External Sector Performance - April 2019
The external sector remained relatively stable in April 2019 supported by a contracting trade deficit.
In April 2019, the deficit in the trade account narrowed to US dollars 797 million from US dollars 999 million in April 2018.
The considerable reduction in the trade deficit in April 2019 was due to the decline in import expenditure by 11 per cent (year-on-year) and a marginal increase of export earnings by 0.4 per cent (year-on-year).
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Sri Lanka Purchasing Managers’ Index - May 2019
Manufacturing activities recovered to an index value of 50.7 in May 2019 which is an increase of 9.7 index points, compared to April 2019. The recovery of manufacturing PMI is mainly attributable to the significant increase in Production and New Orders, especially, in manufacturing of textiles, wearing apparels, leather and related products. Increase in production was mainly attributable to the fulfilment of accumulated orders using extra hours of factory operations. Many respondents, especially in textile and apparel sector, highlighted that they had to work extra hours on week days as well as in weekends during the month to clear the backlog of orders.
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Central Bank of Sri Lanka Receives Presidential Award for Digital Excellence
The Central Bank of Sri Lanka was awarded with the Presidential Award for Digital Excellence at the launch of the National Digital Roadmap by His Excellency the President Maithripala Sirisena, held in Nelum Pokuna Theatre on 11th June 2019. This was presented to the Central Bank of Sri Lanka in recognition of great service rendered paving the way to the digital economy in the country. This was organized by the Sri Lanka Telecom PLC.
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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 February 2019, in order to continue the investigations being conducted by the Central Bank of Sri Lanka.
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Suspension of Business of NatWealth Securities Limited
The Monetary Board of the Central Bank of Sri Lanka (CBSL) at its meeting held on 30.05.2019, having considered the continuous failure to comply with directions applicable to primary dealers, acting in terms of the Regulations made under the Registered Stocks and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to suspend NatWealth Securities Limited (NWSL) 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 31.05.2019.
The CBSL will take necessary measures to ensure that this regulatory action does not have a disruptive impact on the Government Securities market. Action will also be taken to facilitate the handling of the interests of the customers and counterparties of NWSL in an orderly manner.
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Monetary Policy Review - No. 3 of 2019
The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 30 May 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 7.50 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, with the broad aim of stabilising inflation at mid-single digit levels in the medium term to enable the economy to reach its potential.
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External Sector Performance - March 2019
During the first quarter of 2019, the deficit in the trade account contracted to US dollars 1,661 million from US dollars 2,982 million recorded in the first quarter of 2018, as export earnings increased by 5.6 per cent (year-on-year) while import expenditure declined by 19.3 per cent.
In March 2019, the deficit in the trade account narrowed to US dollars 592 million, compared to US dollars 871 million in March 2018.
The considerable reduction in the trade deficit in March 2019 was due to anotable decline in import expenditure by 12.6 per cent (year-on-year)which was further supported by the increase of exportearnings by 2.6 per cent (year-on-year).