Considering the immense requests made and the difficulties faced by the general public in exchanging willfully defaced currency notes after 31.03.2018, the Central Bank of Sri Lanka (CBSL) has decided to continue the service of exchange of willfully mutilated, altered and defaced currency notes from CBSL until further notice.
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Willful Defacement, Alteration and Mutilation of Sri Lanka Currency Notes
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Launch of the Revamped Central Bank of Sri Lanka Corporate Website
The revamped corporate website of the Central Bank of Sri Lanka (CBSL) was launched by Governor Dr. Indrajit Coomaraswamy on 28 March 2018. The URL for the site is https://www.cbsl.gov.lk.
The main features of the new website include additional content, more dynamic and interactive features with improved functionality, mobile compatibility and active social media integration. This will provide a better browsing experience for web users such as professionals, the public, media, and students to ensure efficient and speedy accessibility to information with user friendly interfaces.
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Inflation in February 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 3.2 per cent in February 2018 from 5.4 per cent in January 2018, on year-on-year basis. The high base prevailed in February 2017 as well as the monthly decline in Food prices in February 2018 supported by the favourable supply conditions attributed to this sharp decline in year-on-year inflation in February 2018.
The change in the NCPI measured on an annual average basis decreased from 7.6 per cent in January 2018 to 7.2 per cent in February 2018.
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SL Purchasing Managers’ Index - February 2018
The Manufacturing Sector PMI recorded 55.6 index points in February from 51.7 index points in January 2018. This indicates that the Manufacturing activities expanded at a higher rate in February compared to January 2018 after the seasonal slowdown observed during the previous month. This was mainly driven by the expansion in the New Orders sub-index. The Production sub-index also increased with the increase in new orders. Nevertheless, this increase was relatively low compared to that of new orders due to lesser number of working days in February. Further, Stock of Purchases sub-index also expanded during the month while Employment sub-index expanded marginally. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a higher rate compared to previous month.
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IMF Staff Concludes the 2018 Article IV Mission with Sri Lanka and Discusses Progress of Economic Reform Program
A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.
The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.
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Clarification on the Cancellation of Licence and Certificate of Registration Issued to Central Investments and Finance PLC
The Central Bank of Sri Lanka wishes to further clarify the press release issued on 05.03.2018 with regard to the cancellation of Licence issued to Central Investments and Finance PLC (CIFL) under the Finance Business Act No. 42 of 2011 and Certificate of Registration issued under the Finance Leasing Act No. 56 of 2000. As communicated to the public on 05.12.2017 through our press release all insured deposits of CIFL will be paid up to a maximum of Rs. 600,000/- per depositor as per the regulations of the Sri Lanka Deposit Insurance and Liquidity Support Scheme.
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Central Investments and Finance PLC - Cancellation of Licence issued under the Finance Business Act No. 42 of 2011 and Certificate of Registration issued under the Finance Leasing Act No. 56 of 2000
Central Investments and Finance PLC (CIFL), a Licensed Finance Company (LFC) Licensed under the Finance Business Act No. 42 of 2011 (FBA) has been facing severe financial problems over the last four years due to mismanagement and various fraudulent activities taken place in the company. Depositors of the company have failed to withdraw their money over the last four years. All efforts made to revive the company through different strategies have been failed. The continuity of current status will further detrimental to the interest of depositors and other stake holders of the company.
Therefore, Monetary Board of the Central Bank of Sri Lanka, has decided to cancel the Licence issued to CIFL under the Finance Business Act No. 42 of 2011 (FBA) with effect from 05.03.2018. Accordingly, CIFL is not permitted to engage in Finance Business under the FBA with effect from same date.
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The Central Bank Responds to Misleading News Reports on Future Interest Rate Movements
The attention of the Central Bank of Sri Lanka has been drawn to a few recent media reports claiming that the Central Bank is expecting a rise in domestic interest rates in the period ahead. The reasons cited in the said reports for such expectation are a decline in reserves, higher than expected imports and increased interest rates on government securities.
The Central Bank emphasises that, based on its current projections, an increase in market interest rate is not expected in the near term. The recent movements in headline inflation, core inflation, inflation expectations, broad money growth, credit expansion, expansion in economic activity as well as the international reserve position do not justify the view that a rational market would also expect an increase in interest rates.
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Central Bank Releases Summary Trading Statistics on Government Securities Secondary Market Information for the First Time
As a further policy measure to develop the government securities market, the Central Bank from today has commenced releasing summary trading statistics on actual trading of government securities in the secondary market. From August 1, 2016, all primary dealers have been required to undertake inter-primary dealer trades in the trading platform arranged by the Central Bank through the Bloomberg which is a major international financial trading and information electronic platform. Further, all primary dealers will report all outright sales of government securities of value in excess of Rs. 50 mn to investors to this platform within 30 minutes of each transaction.
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Land Price Index - Second Half of 2017
The Central Bank of Sri Lanka (CBSL) compiles and analyses several indicators, in order to monitor the developments in the real estate sector. Accordingly, the Land Price Index (LPI) is compiled biannually covering the Colombo District since 1998. In the compilation process of LPI, CBSL uses the land price data collected by the Valuation Department of Sri Lanka covering around 50 centers of five Divisional Secretariat (DS) divisions1 in the Colombo District. In view of the diverse nature of the land use and to maintain homogeneity, three indices for residential, commercial and industrial lands are computed separately. The overall LPI is computed by taking the average of these three sub-indices.