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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.

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.


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.

Monetary Policy Review - No. 4 of 2017

With due consideration to the prevailing and evolving domestic and international macroeconomic environment, the Monetary Board, at its meeting held on 22 June 2017, was of the view that the current monetary policy stance is appropriate and decided to maintain the policy interest rates of the Central Bank of Sri Lanka at their present levels.

The decision of the Monetary Board is consistent with the objective of maintaining inflation at mid-single digit levels over the medium term and thereby facilitating a sustainable growth trajectory. The rationale underpinning the monetary policy stance is set out below. 

Inflation in May 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 7.1 per cent in May 2017 from 8.4 per cent in April 2017, on year-on-year basis. This deceleration is mainly due to the base effect amid a monthly increase in NCPI. Both Food and Non-food categories contributed towards the year-on-year inflation in May 2017.

The change in the NCPI measured on an annual average basis increased to 6.1 per cent in May 2017 from 6.0 per cent in April 2017.

Central Bank of Sri Lanka clarifies the position on wilfull mutilation, alteration and defacement of currency notes

The attention of the Central Bank of Sri Lanka (CBSL) has been drawn to misinterpretation of the facts contained in the newspaper advertisements published by the CBSL in implementation of its Clean Note Policy. The Clean Note Policy has been introduced by the CBSL aiming at maintaining the quality standards of the currency notes and thereby helping to distinguish between genuine notes and counterfeits. It is also expected through this policy to enhance image of the country and promote efficient and cost effective currency notes processing activities.

Wilfull mutilation, alteration or defacement of currency notes are offenses punishable under the Monetary Law Act. Moreover the CBSL has to increase its note printing to replace such wilfully mutilated, altered or defaced currency notes requiring it to incur large amount of public funds which otherwise could have been spent for more meaningful purposes. The CBSL has no obligation to entertain claims in respect of deliberately mutilated, altered or defaced currency notes.