The Executive Board of the International Monetary Fund (IMF) concluded the 2018 Article IV consultation with Sri Lanka and completed the fourth review of the three-year Extended Fund Facility (EFF), approving the disbursement of the fifth tranche amounting to SDR 177.774 million (approximately US dollars 252 million). The EFF aims at supporting the Balance of Payments and the broad economic reform agenda of the government.
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The International Monetary Fund Releases the Fifth Tranche of US dollars 252 million under the Extended Fund Facility
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External Sector Performance - March 2018
The external sector displayed a mixed performance in March 2018. Even though expenditure on imports continued to increase, exports which peaked to historic high levels in March 2018, contributed to a lower trade deficit vis-a-vis the previous two months of the year. Earnings from tourism increased notably in March 2018 continuing the positive trend observed since January 2018. Workers’ remittances rose during the month reversing the decline recorded in February 2018. Meanwhile, the financial account of the Balance of Payments (BOP) experienced some outflows in March, particularly with the withdrawal of foreign investments from the government securities market and the Colombo Stock Exchange (CSE). The level of gross official reserves of the country remained at a healthy level.
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Deshamanya Amarananda Somasiri Jayawardena, Former Governor of the Central Bank, Passes Away
The Central Bank, with deep sorrow, wishes to announce the demise of Deshamanya Amarananda Somasiri Jayawardena, former Governor of the Central Bank of Sri Lanka. He passed away at the age of 82, on the 29th of May, 2018.Deshamanya A S Jayawardena was the tenth Governor, functioning in this position from November 1995 to June 2004. He joined the Central Bank in 1958 and served in the Secretariat, Establishments and Economic Research Departments before being appointed as Director of Economic Research (1977 – 1980).
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External Debt and Reserves - Need to identify not only borrowings but also the debt repayments in analyzing how gross official reserves were utilized
A misleading news item has been disseminated in relation to Sri Lanka’s foreign reserves and external debt servicing.
The contents of the news item portray a misleading picture of the country’s external position. While stating that around USD 8.9 billion of borrowings by the government were absorbed to Central Bank reserves during 2015-2018, the article provides no consideration on the significant debt repayment effected by utilization of reserves during the period, which the Central Bank is obligated to as the official debt manager of the government.
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Purchasing Managers’ Index (PMI) Survey
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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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.