• NCPI based annual average headline inflation rises to 6.2 per cent, while Y-o-Y inflation increases to 11.1 per cent in November 2021

    Headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100), increased to 11.1 per cent in November 2021 from 8.3 per cent in October 2021. Meanwhile, on an annual average basis, the NCPI increased to 6.2 per cent in November 2021 from 5.7 per cent in October 2021.

    Inflation was driven by monthly increases of prices of items in both Food and Non-food categories. Subsequently, Food inflation (Y-o-Y) increased to 16.9 per cent in November 2021 from 11.7 per cent in October 2021, while Non-Food inflation (Y-o-Y) also increased to 6.2 per cent in November 2021 from 5.4 per cent in October 2021.

  • External Sector Performance - October 2021

    The merchandise trade deficit, which has been falling on a month-on-month basis since May 2021, declined further to US dollars 495 million in October 2021. Earnings from exports recorded the highest monthly export value in history in October 2021, while marking the fifth consecutive month of above US dollars 1.0 billion of export earnings. Such improvement in export earnings, along with improving conversions, is expected to strengthen foreign exchange inflows to the domestic foreign exchange market in the period ahead. The import expenditure also recorded a y-o-y growth in October 2021. Tourist arrivals continued the growth momentum with a notable increase over the previous month. A further moderation of workers’ remittances was observed in October 2021. Foreign investments in the government securities market and the Colombo Stock Exchange (CSE) recorded marginal net outflows during the month. Meanwhile, the weighted average spot exchange rate in the interbank market hovered around Rs. 201 per US dollar during the month.

  • The Government Strongly Disputes the Hurried Rating Action by Fitch Ratings

    Fitch Ratings (Fitch), in a rather hasty move, downgraded Sri Lanka’s international sovereign rating on 17 December 2021, demonstrating its failure to recognise the positive developments taking place in Sri Lanka, in an environment in which the entire world is grappling with multiple waves of the COVID-19 pandemic. This action resembles the recent unwarranted downgrade by Moody’s Investors Service a few days prior to the announcement of the National Budget 2022. The sense of urgency on the part of an internationally recognised rating agency to downgrade Sri Lanka is inconceivable, particularly considering the fact that Fitch was being constantly updated by Sri Lankan authorities on the latest developments in all sectors of the economy and imminent foreign exchange inflows.

  • Provincial Gross Domestic Product (PGDP) - 2020

    Amidst outbreak of the COVID-19 pandemic, Western province continued to be the nerve center of the economy whilst its share declined, contributing to an overall contraction.

    Western province secured the largest share (38.0 per cent) of the  country’s nominal GDP. However, due to slow down in economic activities due to the pandemic situation, the share declined by 1.0 per cent from 2019.  Central (11.3 per cent) and North Western (11.0 per cent) provinces were ranked at second and third positions, respectively. 

    PGDP shares increased in North Western, Southern, Sabaragamuwa, and North Central provinces while in Western and Northern provinces, share decreases could be observed year-on-year.   

  • SL Purchasing Managers’ Index (PMI) – November 2021

    Purchasing Managers' Indices for both Manufacturing and Services activities expanded further in November 2021.

    Benefitting from the normalising of economic activities in the country, the Manufacturing PMI continued to expand in November 2021 and recorded an index value of 61.9.

    Services sector PMI registered an index value of 62.1 indicating a further solid performance in November 2021.

  • The Credit Information Bureau (CRIB) donated Rs. 50 Mn to the “COVID – 19 Healthcare and Social Security Fund”

    “COVID – 19 Healthcare and Social Security Fund” that has been established by His Excellency President Gotabaya Rajapaksa to strengthen the mitigation activities aimed at controlling the spread of COVID-19 virus in the country and related social welfare programme, have been vested with a set of wide responsibilities. Local as well as foreign donors can make their financial contributions to the “COVID – 19 Healthcare and Social Security Fund”.

    The Governor of the Central Bank of Sri Lanka, Hon. Ajith Nivard Cabraal, in his capacity as the Chairman of the “COVID – 19 Healthcare and Social Security Fund”, accepted the generous donation of Rs. 50.0 million to the “COVID – 19 Healthcare and Social Security Fund” from Mr. Nandi Anthony, General Manager, CRIB.

  • Central Bank Initiates Regulatory Actions Against Errant Money Changers

    In response to several complaints that certain Authorized Money Changers are engaged in activities which are not in compliance with the Directions issued under the provisions of the Foreign Exchange Act No. 12 of 2017 (FEA), the Central Bank is conducting a series of spot examinations at the places of Authorized Money Changers, thereby strengthening the monitoring and supervision of the Authorized Money Changers.

    In the spot examinations conducted during the months of November and December 2021, it was revealed that the following Authorized Money Changers have not complied with the Directions issued to them under the provisions of FEA. Accordingly, after the Minister of Finance being informed, Notices have been issued to them to comply with the relevant Directions, within a specified time period.

  • The Central Bank issues Operating Instructions on “Additional Incentive Scheme on Inward Workers’ Remittances”

    The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to pay an incentive of Rs. 8.00 per US dollar for workers’ remittances, in addition to the existing incentive of Rs.2.00 under the “Incentive Scheme on Inward Workers’ Remittances”, when such funds are remitted through Licensed Banks (LBs) and other internationally accepted formal channels and converted into Sri Lankan rupees during the period from 01.12.2021 to 31.12.2021.

    Accordingly, the total incentive for inward workers’ remittances converted into Sri Lankan rupees during the month of December 2021 will be Rs. 10.00 per US dollar.

  • Request for Proposals for Securitised Financing Arrangement for the Government of Sri Lanka

    The Central Bank of Sri Lanka (CBSL), on behalf of the Government of Sri Lanka (GOSL) requested proposals from international investor community on 12 November 2021 for the arrangement of a medium-term foreign currency financing facility by securitising the foreign currency receipts of the Central Bank of Sri Lanka under the mandatory sale of ten (10) per cent of workers’ remittances converted into Sri Lankan Rupees by licensed banks. The deadline for submitting responses was 15.00 hrs on 30 November 2021.

    Accordingly, there were seven (7) responses, among which there were five (5) leading international banks and two (2) established investment arrangers.

    These responses are being reviewed to determine the most suited modality to initiate the securitised financing arrangement.

  • CCPI YoY inflation increases to 9.9 per cent, while annual average inflation rises to 5.3 per cent in November 2021

    Headline inflation, as measured by the year-onyear (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100), increased to 9.9 per cent in November 2021 from 7.6 per cent in October 2021. Meanwhile, the CCPI measured on an annual average basis, increased to 5.3 per cent in November 2021 from 4.8 per cent in October 2021.

    Inflation was driven by monthly increases of prices of items in both Food and Non-food categories. Subsequently, Food inflation (Y-o-Y) increased to 17.5 per cent in November 2021 from 12.8 per cent in October 2021, while Non-food inflation (Y-o-Y) increased to 6.4 per cent in November 2021 from 5.4 per cent in October 2021.

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