• CCPI based Inflation decreased to 3.9 per cent in April 2021

    Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100) decreased to 3.9 per cent in April 2021 from 4.1 per cent in March 2021. This was driven by monthly decreases of prices of items in the Food category. Meanwhile, Food inflation (Y-o-Y) decreased to 9.0 per cent in April 2021 from 9.6 per cent in March 2021, while Non-food inflation (Y-o-Y) remained unchanged at 1.8 per cent in April 2021.

    The change in the CCPI measured on an annual average basis decreased marginally to 3.9 per cent in April 2021 from 4.0 per cent in March 2021.

  • The Central Bank of Sri Lanka Releases its Annual Report for the Year 2020

    In terms of Section 35 of the Monetary Law Act No. 58 of 1949, the seventy first Annual Report of the Monetary Board of the Central Bank of Sri Lanka was presented to Hon. Mahinda Rajapaksa, the Prime Minister and the Minister of Finance, by Deshamanya Professor W D Lakshman, the Governor of the Central Bank of Sri Lanka.

  • Revised Regulations Issued Under the Foreign Exchange Act, No.12 of 2017

    Regulations issued under the Foreign Exchange Act, No. 12 of 2017 (FEA) have been revised for further simplification and clarity improvement, with the objectives of achieving greater efficiency in the conduct of cross-border foreign exchange transactions alongside further facilitating economic activities of the stakeholders through greater convenience of doing business.

    These revised foreign exchange policy framework as highlighted above, has been implemented with effect from 22 March 2021. Inter-alia, key highlights of policy measures so introduced, are as follows.

  • NCPI based Inflation increased in March 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 5.1 per cent in March 2021 from 4.2 per cent in February 2021. This was due to the statistical effect of the low base prevailed in March 2020. Meanwhile, Food inflation (Y-o-Y) increased to 8.8 per cent in March 2021 from 6.9 per cent in February 2021 and Non-Food inflation (Y-o-Y) increased marginally to 2.0 per cent in March 2021 from 1.9 per cent in February 2021. The change in the NCPI measured on an annual average basis decreased to 5.3 per cent in March 2021 from 5.5 per cent in February 2021.

  • External Sector Performance - February 2021

    The increase in exports to the pre-pandemic levels, the notable increase in workers’ remittances and the relative stability in the domestic foreign exchange market supported Sri Lanka’s external sector in February 2021. The trade deficit in February 2021 broadly remained unchanged at the level reported a year ago. In the financial account, both foreign investment in the government securities market and the Colombo Stock Exchange (CSE) recorded net outflows in February 2021. The SAARCFINANCE swap facility of US dollars 400 million obtained from the Reserve Bank of India in July 2020 was repaid in February 2021 upon maturity. Net inflows to the domestic foreign exchange market eased the pressure on the exchange rate during the month and the regulatory measures enabled the Central Bank to absorb foreign exchange on a net basis, to build up gross official reserves.

  • Introduction of a Regulatory Framework to Facilitate Foreign Currency Borrowings by Licensed Finance Companies

    The Monetary Board of the Central Bank of Sri Lanka (CBSL) issued directions on foreign currency borrowings by Licensed Finance Companies (LFCs) on 9th April 2021 with a view to provide flexibility for LFCs to obtain low-cost funding from foreign sources to support their business expansions. The objectives of these directions are to stabilise any financial volatilities created by the foreign funding exposures of LFCs and provide a risk management framework for such foreign currency borrowings.

  • Repatriation of Export Proceeds into Sri Lanka

    The Monetary Board, having considered the requests made by exporters of goods, has amended the Rule No. 2 of 2021 as published in the Gazette Extraordinary No. 2218/38 dated 09.03.2021 to reflect the following.  

  • Sri Lanka Purchasing Managers’ Index - March 2021

    Indicating a strong revival in manufacturing activities in the country,  the manufacturing PMI reached  a  9-month high  at 67.0 in March 2021. This was largely attributable to the increases observed  in  Production,  New  Orders,  and  Stock  of  Purchases sub-indices.The  significant  increases  in  New  Orders  and  Production  sub-indices,  particularly  in  the  manufacture  of  food  &  beverages  and textile  &  wearing  apparel  sectors,  have  mainly contributed  to  the improvement  in  the  overall  index.  Many  respondents  in  the manufacture  of  food  &  beverages  sector  highlighted  that  they experienced  higher  levels  of  sales  and  production  during  March 2021 ahead of the New Year festival season. Further, respondents from  the  textile  &  wearing  apparel  sector  mentioned  that  they increased  production  during  the  month  to  cover-up  seasonal holidays.

  • Suspension of Business of 'Swarnamahal Financial Services PLC'

    The Monetary Board of the Central Bank of Sri Lanka (Monetary Board) has decided to suspend business of Swarnamahal Financial Services PLC (SFSP), in terms of Section 31(1) of the Finance Business Act, No. 42 of 2011 (FBA) with effect from 5:00 p.m. on 12th April 2021. Having considered the continuously deteriorating financial condition and non-availability of a viable revival plan, the Monetary Board decided to suspend the business of SFSP and its parent Company ETI Finance Limited (ETIF) in terms of Section 31(1) of the FBA with effect from 13th July 2020 and the period of suspension of business activities was in effect until 12th January 2021.

  • Payment of Additional Compensation under the Sri Lanka Deposit Insurance and Liquidity Support Scheme

    The Central Bank of Sri Lanka wishes to inform the depositors/legal beneficiaries of The Finance Company PLC that the payment of additional compensation under the Sri Lanka Deposit Insurance and Liquidity Support Scheme  will commence on 12.04.2021 as already scheduled.

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