Sri Lanka’s external sector remained subdued with a widening of the trade deficit, a moderation in tourist earnings and a modest growth in workers’ remittances in February 2017. A considerable widening in the trade deficit was observed in February with a decline in exports amidst increased imports mainly due to higher imports of fuel and rice. Earnings from tourism dipped with a marginal decline in tourist arrivals during the month, which could partly be attributed to the day time closure of the Bandaranayke International Airport (BIA) for resurfacing of the runway. The growth in workers’ remittances in February remained below the expected level. Further, the financial account was adversely affected by significant outflows from the government securities market during the month.
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External Sector Performance – February 2017
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External Sector Performance - March 2017
Reversing the declining trend observed during the last two months, earnings from exports increased by 9.8 per cent (year-on-year) in March 2017. However, the trade deficit widened in March 2017 compared to the corresponding month of 2016 as the increase in export earnings was offset by the higher increase in import expenditure. Tourist earnings declined in March 2017, as in the previous month, with the partial closure of the Bandaranaike International Airport (BIA) for resurfacing of the runway. Meanwhile, workers’ remittances also recorded a decline in March 2017. In the financial account, foreign inflows to the Colombo Stock Exchange (CSE) continued to record a net inflow while a reversal of trend in net outflows by foreign investors was observed in the government securities market with marginal net inflows during the month.
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Appointment of a New Deputy Governor
The Monetary Board, with the concurrence of the Hon. Minister of Finance, has promoted Assistant Governor, Mr. K D Ranasinghe to the post of Deputy Governor of the Central Bank of Sri Lanka (CBSL) with effect from 30th April 2017.
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CBSL Denies Incorrect Media Reports on Qatari Riyals
The Central Bank of Sri Lanka categorically denies reports by various media institutions stating that “the Central Bank has informed banks not to accept Qatari Riyals”.
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External Sector Performance - February 2017
Sri Lanka’s external sector remained subdued with a widening of the trade deficit, a moderation in tourist earnings and a modest growth in workers’ remittances in February 2017. A considerable widening in the trade deficit was observed in February with a decline in exports amidst increased imports mainly due to higher imports of fuel and rice. Earnings from tourism dipped with a marginal decline in tourist arrivals during the month, which could partly be attributed to the day time closure of the Bandaranayke International Airport (BIA) for resurfacing of the runway. The growth in workers’ remittances in February remained below the expected level. Further, the financial account was adversely affected by significant outflows from the government securities market during the month.
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Inflation in April 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 (DCS), decelerated to 8.4 per cent in April 2017 from 8.6 per cent in March 2017, on year-on-year basis. Both Food and Non-food categories contributed towards the year-on-year inflation in April 2017. The change in the NCPI measured on an annual average basis increased to 6.0 per cent in April 2017 from 5.6 per cent in March 2017.
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Central Bank releases the publication 'A Guide to Financial Services in Sri Lanka'
The Central Bank released its new publication “A Guide to Financial Services in Sri Lanka” specifically compiled for the awareness of the general public. This publication was authored by Mr. P Samarasiri, Deputy Governor, in honor and gratitude to Mr. A S Jayawardena, the Governor November 1995 – June 2004, who proposed and guided Mr. Samarasiri to compile and release this publication first time in April 2002 in order to educate the general public on basic financial services in Sri Lanka. The publication contains basic information on financial institutions, their services, lists of various institutions licensed by the Central Bank, nature of regulation and supervision and safety of public transactions with financial institutions and is presented in a reader-friendly language. Sinhala and Tamil editions of the publication will be released in due course.