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, decreased to 4.5 per cent in August 2016 from 5.8 per cent in July 2016, on year-on-year basis. Both Food and Nonfood categories contributed towards the year-on-year inflation in August 2016.
The change in the NCPI measured on an annual average basis increased to 3.6 per cent in August 2016 from 3.4 per cent in July 2016.
The Financial Intelligence Unit of the Central Bank of Sri Lanka (FIU - Sri Lanka) entered into a Memorandum of Understanding (MOU) with the Suspicious Transaction Reporting Office of Singapore (STRO) on the basis of reciprocity and in the spirit of cooperation and mutual interest and within the framework of each Authority’s national legislation, to facilitate the exchange of information related to investigations and prosecutions of money laundering and terrorist financing on September 01, 2016. This MOU has been entered into by the FIU – Sri Lanka, in terms of the provisions of the Financial Transactions Reporting Act, No. 6 of 2006.
The external sector performance was driven by a double digit growth in exports (yearon-year) in September 2017, surpassing the US dollars 1 billion mark of monthly exports for the third consecutive month. However, the trade deficit expanded with higher imports of fuel and rice during the month. Earnings from tourism declined moderately during the month with a slightly lower number of tourist arrivals from key destinations compared to September 2016. The moderation in workers’ remittances continued in September, resulting in a noteworthy decline in workers’ remittances in the first nine months of 2017. However, reflecting continuous investor confidence, the financial account of the Balance of Payments (BOP) continued to strengthen during the month with higher foreign inflows to the Colombo Stock Exchange (CSE) and the government securities market.
With a view to further liberalizing capital flows and simplifying the processes associated with current account transactions and various types of foreign currency/Rupee accounts, the Government declared in its Budget Proposals for 2016, that a new foreign exchange law will be introduced.
In keeping with this announcement, a new legislative and policy framework for foreign exchange operations has been implemented by the Foreign Exchange Act, No. 12 of 2017 with effect from November 20, 2017, repealing the Exchange Control Act, No. 24 of 1953. Provisions of the new Act are being implemented through the newly established Department of Foreign Exchange in the Central Bank of Sri Lanka.
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. 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's Executive Board for discussion and decision.
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), increased to 8.8 per cent in October 2017 from 8.6 per cent in September 2017, on year-on-year basis.
The change in the NCPI measured on an annual average basis increased from 6.8 per cent in September 2017 to 7.1 per cent in October 2017.
According to the Department of Census and Statistics (DCS), the Sri Lankan economy is provisionally estimated to have grown by 2.6 per cent, year-on-year, during the second quarter of 2016 compared to the growth of 7.0 per cent recorded in the same period of 2015. Meanwhile, growth in the first quarter 2016 was revised to 5.2 per cent.
The Manufacturing Sector PMI recorded 54.8 in October which is a decrease of 4.2 index points compared to September 2017. This indicates that the Manufacturing activities expanded at a slower pace in October compared to September 2017. This was mainly driven by the New Orders and Employment sub-indices which moderated from the levels of increase observed in the previous month. The Production and Stock of Purchases sub-indices also expanded at slower rates in October. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a higher rate which was led by lengthening of delivery time of overseas suppliers due to the high demand for their supplies from other countries. Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold signalling an overall expansion in October 2017, but at a slower pace than the previous month.
In terms of the provisions of the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), the Financial Intelligence Unit (FIU) of Sri Lanka entered into a Memorandum of Understanding (MOU) with the Department of Immigration and Emigration on September 27, 2016 at the Central Bank of Sri Lanka to receive information in order to facilitate investigations and prosecutions on money laundering and terrorist financing. Mr. M. N. Ranasinghe, Controller General, Department of Immigration and Emigration and Mr. H. Amarathunga, Director, FIU signed the MOU on behalf of the respective institutions in the presence of Dr.
There has been widespread coverage in the press and electronic media regarding a report related to the examination of Perpetual Treasuries Ltd conducted by the Central Bank of Sri Lanka as the regulator of Primary Dealers operating in the Government securities market.
The release of this report into the public domain has not been authorized. The Central Bank of Sri Lanka’s internal processes within the Department of Supervision of Non-Bank Financial Institutions have not been completed and the final report has not as yet been submitted to the Monetary Board for its consideration. Arising from this unauthorized disclosure, the Central Bank of Sri Lanka is strengthening its internal control mechanisms and a complaint has also been made to law enforcement authorities to inquire into the unauthorized release of this report.
