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 findings so far, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
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IMF Reaches Staff-Level Agreement on the Second Review of Sri Lanka’s Extended Fund Facility
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External Sector Performance – January 2017
Sri Lanka’s external sector demonstrated a modest performance in January 2017. During the month, the trade deficit widened as a result of increased import expenditure and a decline in export earnings. However, foreign currency receipts in terms of earnings from tourism recorded a relatively high growth in January 2017 while workers’ remittances grew at a moderate rate, year–on-year. The government securities market and the Colombo Stock Exchange (CSE) witnessed net outflows during January 2017.
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'Central Bank Comes to You…' Open Day Programme conducted by the Central Bank of Sri Lanka
The Central Bank of Sri Lanka (CBSL) will conduct its first Open Day Programme “Central Bank Comes to You…” at the CBSL Regional Office Matale, at No. 805, Trincomalee Street, Mandandawala, Matale on Friday 5th and Saturday 6th May 2017 from 9.00 a.m. to 8.00 p.m.
The purpose of the programme is to enable the General Public to access services provided by the CBSL, such as services relating to EPF , exchange of damaged currency notes and issue of coins, currency museum, sale of CBSL publications, SMI loan schemes etc. and to interact with the Governor and senior management of the CBSL.
Sessions will be held on issues concerning exchange control regulations, pyramid schemes, unauthorized financial businesses, microfinance companies etc.
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Transparency in Government Securities Market Further Improves
The Central Bank on 26.04.2017 mandated the primary dealers and licensed banks to use the Bloomberg electronic bond trading platform to trade repurchase transactions (repos) in government securities. Accordingly, they are required to:
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Amalgamation of the Operation of Regional Sub-office of the Central Bank of Sri Lanka in Jaffna with Regional Office in Kilinochchi
The public is hereby notified that the Regional Sub-office of the Central Bank of Sri Lanka (CBSL) in Jaffna shifted its operations to Regional Office, Ariviyal Nagar, Kilinochchi with effect from 15 June 2017. Accordingly, services provided by Jaffna Sub-office such as providing Employees’ Provident Fund (EPF) related services, maintaining of sales counter for CBSL publications, conducting awareness programmes on financing, development of managerial and business skills, promoting credit delivery mechanisms in the Jaffna region will be carried out through the Regional Office in Kilinochchi, in addition to the current operational activities of that office.
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Licensed Banks Adopt Basel III Capital Standards to Strengthen Resilience
Commencing 01 July 2017, licensed banks in Sri Lanka will adopt minimum capital standards based on the Direction issued by the Central Bank of Sri Lanka in late 2016. This Direction is in line with the Basel III guidelines issued by the Bank for International Settlements (BIS) related to capital, leverage and liquidity in order to strengthen resilience of banks.
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Suspension of Business of Perpetual Treasuries Limited
The Monetary Board of the Central Bank of Sri Lanka on 06th July 2017, acting in terms of the Regulations made under the Registered Stocks and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to suspend Perpetual Treasuries Limited (PTL) from carrying on the business and activities of a Primary Dealer for a period of six months with effect from 4.30 p.m. on 06th July 2017.
The Central Bank will take necessary measures to ensure that this regulatory action does not have a disruptive impact on the market. Action will also be taken to facilitate the handling of the interests of the customers and counterparties of PTL in an orderly manner.
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External Sector Performance - April 2017
Sri Lanka’s external sector displayed a mixed performance in April 2017. Although export earnings increased in April 2017, the higher growth in import expenditure resulted in an expansion of the trade deficit. Despite the increase in tourist earnings in April 2017, the decline in workers’ remittances together with the expanded trade deficit moderated the performance of the external current account. However, the financial account of the Balance of Payments (BOP) was supported by continued foreign inflows to the Colombo Stock Exchange (CSE) and the government securities market in April 2017.
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The Annual Report of the Central Bank of Sri Lanka for the Year 2016
In terms of Section 35 of the Monetary Law Act No. 58 of 1949, the sixty seventh Annual Report of the Monetary Board of the Central Bank of Sri Lanka was presented to Hon. Ravi Karunanayake, the Minister of Finance, by Dr. Indrajit Coomaraswamy, the Governor of the Central Bank of Sri Lanka.
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Inflation in March 2017
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, increased to 8.6 per cent in March 2017 from 8.2 per cent in February 2017, on year-on-year basis. Both Food and Non-food categories contributed towards the year-on-year inflation in March 2017. The increase in year-on-year inflation in March 2017 is due to the low base that prevailed in the corresponding period of the previous year.
The change in the NCPI measured on an annual average basis increased to 5.6 per cent in March 2017 from 5.1 per cent in February 2017.