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IMF Reaches Staff-Level Agreement on the Second Review of Sri Lanka’s Extended Fund Facility

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.

  • The staff-level agreement is subject to the completion of a prior action by the authorities and the approval of the IMF Executive Board, which is expected to be considered in June 2017.
  • The new Inland Revenue Act should pave the way for a durable fiscal consolidation.
  • Maintaining the reform momentum in an uncertain external environment is important for addressing fiscal and external vulnerabilities.

After constructive discussions with the authorities during the visit to Colombo in March, and more recently during the Spring Meetings, an IMF staff team issued the following statement in Washington DC:

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:

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.


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.

SL Purchasing Managers’ Index Survey - March 2017

The Manufacturing sector PMI recorded 66.5 in March which is an increase of 9.4 index points compared to February 2017. This indicates that the manufacturing activities continued to expand in March 2017, largely attributable to increasing orders and manufacturing activities due to new year seasonal demand as reflected through increased in New Orders and Production sub-indices. Stock of Purchases increased with accumulated stock and rectification of delivery delays which witnessed during last month. However, Suppliers’ Delivery Time indicated a decline with normalising supply arrangements especially from China after their new year period. The Employment sub-index also dropped slightly compared to the previous month. Overall data points to an expansion where all the sub-indices are above the neutral 50.0 threshold. The expectations for activities indicated a moderation for the next three months.

Statement Issued by the Central Bank of Sri Lanka Clarifying Certain Media Reports on the Examination of the Employees’ Provident Fund Transactions in Government Securities

The Central Bank of Sri Lanka wishes to clarify its position on certain media reports that carried erroneous facts on the proceedings of the Monetary Board meeting held recently.

The Monetary Board had a discussion on the Report on the Examination of the Employees’ Provident Fund Transactions in Government Securities with a view to decide the suitable course of action to be followed in respect of the findings. The Monetary Board decided to commence disciplinary proceedings in terms of the internal procedures of the Central Bank of Sri Lanka against any officials of the Bank where there is evidence of wrongdoing.