Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100), remained unchanged at 4.0 per cent in October 2020 due to the statistical effect of the high base prevailed in October 2019. Meanwhile, Food inflation (Y-o-Y) decreased to 10.0 per cent in October 2020 from 11.5 per cent in September 2020, whereas Non-food inflation (Y-o-Y) increased to 1.3 per cent in October 2020 from 0.9 per cent in September 2020.
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CCPI based Inflation remained unchanged at 4 per cent in October 2020
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Special Arrangements made by Employees’ Provident Fund Department of the Central Bank of Sri Lanka to Provide Uninterrupted EPF Related Services to its Stakeholders
EPF Department of the Central Bank of Sri Lanka wishes to inform all its stakeholders on the arrangements that have been made to provide its services uninterruptedly amidst the difficult situation prevailing in the country due to Covid-19 pandemic. Services of settling refunds, collection of contributions, issuing of balance confirmations and contribution history reports and name and account amendments will be provided as follows.
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Cancellation of the Licence issued to ICICI Bank Limited (ICICI Colombo Branch)
The Monetary Board of the Central Bank of Sri Lanka, having considered the request made by the ICICI Bank Limited, India, has granted approval to close down business operations of ICICI Bank Limited in Sri Lanka and cancel the licence issued to it in terms of the provisions of the Banking Act, No. 30 of 1988, subject to several terms and conditions.
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The Central Bank of Sri Lanka Continues its Accommodative Monetary Policy Stance
The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 21 October 2020, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 per cent and 5.50 per cent, respectively, thereby continuing the prevailing accommodative monetary policy stance. The Board noted the decline in overall market lending rates, following the unprecedented monetary easing measures taken by the Central Bank thus far during the year, and expects the broadbased downward adjustment in market lending rates to continue, thereby ensuring affordable credit flows to productive sectors of the economy in the prevailing low inflation environment.
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NCPI based Inflation increased in September 2020
Headline inflation as measured by the yearon-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100) increased to 6.4 per cent in September 2020 from 6.2 per cent in August 2020. This was driven by the monthly increases in prices of items in both Food and Non-food categories. Meanwhile, Food inflation (Y-o-Y) decreased to 12.7 per cent in September 2020 from 13.2 per cent in August 2020 due to the statistical effect of the high base prevailed in September 2019, whereas Non-food inflation (Y-o-Y) increased to 1.4 per cent in September 2020 from 1.1 per cent in August 2020.
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Central Bank Approved 61,907 Loans Amounting to Rs. 178 billion through Saubagya COVID-19 Renaissance Facility
The Central Bank of Sri Lanka, as of 15th October 2020, approved 61,907 loan applications received from COVID-19 affected businesses. These applications were for a total of Rs. 177,954 million and registered under the three Phases of the Saubagya COVID-19 Renaissance Facility. So far, the Licensed Banks have released loans amounting to Rs. 133,192 million among 45,582 affected businesses island-wide (See Table 1 for details).
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Sri Lanka Purchasing Managers’ Index - September 2020
Purchasing Managers' Indices for both Manufacturing and Services activities expanded in September
Manufacturing activities expanded at a higher rate in September 2020, compared to August 2020. This expansion in manufacturing PMI was mainly attributable to the increase in Production and New Orders, especially in manufacturing of food & beverages and textiles & wearing apparel sectors.
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External Sector Performance - August 2020
Sri Lanka’s external sector continued to recover in relation to many aspects during August 2020, mainly supported by an improved trade deficit and a notable increase in workers’ remittances. The trade deficit improved on a year-on-year basis, with the reduction in merchandise imports due to regulatory restrictions on the importation of non-essential goods and lower crude oil prices, despite earnings from merchandise exports recording a year-on-year decline during the month. Nevertheless, the export performance remained strong for the third consecutive month in spite of the pandemic affected global demand. Meanwhile, workers’ remittances recorded a substantial growth in August 2020, strengthening the current account.
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Launch of the National LANKAQR initiative
The National LANKAQR Initiative “ රට පුරාම (Rata Puraama) LANKAQR” was launched on 5th October 2020 at the Central Bank of Sri Lanka (CBSL) by Hon. Dr. Bandula Gunawardena, Minister of Trade as the Chief Guest, in the presence of Hon. Ajith Nivard Cabraal, State Minister of Money & Capital Market and State Enterprise Reforms, Hon. Lasantha Alagiyawanna, State Minister of Co-operative Services, Marketing Development and Consumer Protection, Hon. Shehan Semasinghe, State Minister of Samurdhi, Household Economy, Micro Finance, Self-Employment, Business Development and Underutilized State Resources Development, Governor of the CBSL, Deshamanya Prof. W D Lakshman, Members of the Monetary Board including Mr. S.R. Attygalle, Secretary to the Treasury, Ministry of Finance.
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The Central Bank of Sri Lanka Successfully Completes the Settlement of the Maturing International Sovereign Bond of US Dollars 1 Billion on Behalf of the Government of Sri Lanka
On 02 October 2020, the Central Bank of Sri Lanka successfully completed the settlement of the maturing International Sovereign Bond of US dollars 1 billion along with the due coupon payments, on behalf of the Government of Sri Lanka.