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SL central bank maintains interest rates at current level

It means the sum of the scores generated by the model on all 32 increased sharply to 2,234 from 1,744 since May…reports Asian Lite News

The Central Bank of Sri Lanka on Thursday’s announced its to maintain the Standing Deposit Facility Rate and Standing Lending Facility Rate at the current level of 14.50 per cent and 15.50 per cent, respectively.

Its Monetary Board made the decision after considering recent and expected developments related to both the domestic and global economy as well as macroeconomic projections, Xinhua news agency quoted the bank as saying in a statement.

The board noted that sticking to a tight monetary policy stance is necessary to contain any demand-driven inflationary pressures on the economy.

This will help the Southeast Asian country lower inflation towards the targeted range of 4-6 per cent over the medium term, according to the bank.

Supported by favourable supply-side developments and tight monetary policy measures, inflation dipped in October after passing the peak in September, the bank said.

Inflation will continue to decline in the coming months largely due to a drop in demand, expected improvements in domestic supply, and normalization of global commodity prices, according to the statement.

Currency crisis

Nomura Holdings, Japan’s top brokerage and investment bank, has warned that seven countries — Pakistan, Egypt, Romania, Sri Lanka, Turkey, Czech Republic, and Hungary — are now at a high risk of currency crises.

The Japanese bank said that 22 of the 32 countries covered by its in-house “Damocles” warning system have seen their risk rise since its last update in May, with the largest increases in the Czech Republic and Brazil, Geo News reported.

It means the sum of the scores generated by the model on all 32 increased sharply to 2,234 from 1,744 since May.

“This is the highest total score since July 1999 and not too far from the peak of 2,692 during the height of the Asian crisis,” Nomura economists said, calling it “an ominous warning sign of the growing broad-based risk in EM currencies”, Geo News reported.

The model crunches eight key indicators — a country’s foreign exchange reserves, exchange rate, financial health, and interest rates — to give an overall score.

Based on data from 61 different EM currency crises since 1996, Nomura estimates that a score above 100 indicates a 64 per cent chance of a currency crisis in the following 12 months.

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Ranil directs to implement suspended Sri Lanka-Singapore FTA

President Wickremesinghe made the instructions during a discussion with officials related to foreign policy, trade, legal and other areas…writes Susitha Fernando

Sri Lanka President Ranil Wickremesinghe on Wednesday directed to implement the suspended Singapore-Sri Lanka Free Trade Agreement (FTA) immediately.

President Wickremesinghe made the instructions during a discussion with officials related to foreign policy, trade, legal and other areas.

“The existing problems in this regard were discussed at length and the President highlighted the need to provide quick solutions to all the existing problems,” President’s Media Division said in a statement.

In September, Wickremesinghe who met Singapore Prime Minister Lee Hsien Loong in Tokyo on the side-lines of a state funeral for the slain PM Shinzo Abe had assured that 2018 pact signed when he was the Prime Minister would be revived.

Penned in January 2018, the free-trade pact between the two island nation was suspended due to severe objections from Sri Lanka’s opposition parties, trade unions and other professional bodies.

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In May 2021, Sri Lanka tried to revive it with a number of amendments but it was not successful.

Signed on January 23 after 18 months of negotiations between the two countries, Sri Lanka-Singapore Free Trade Agreement (SL-SFTA) was considered a ‘giant leap’ in terms of implementation and laying down of a marker that Sri Lanka was moving into a new era of international trade.

The pact was to cover areas such as Goods, Services, Investments, Rules of Origin, Intellectual Property rights, Customs Procedure and Trade Facilitation, Government Procurement, Trade Remedies, Economic and Technical Cooperation, Dispute Settlement, Telecommunications and E-commerce.

Meanwhile the Non-Resident High Commissioner of Singapore, Chandra Das is to meet President Ranil Wickremesinghe during his visit to Sri Lanka from November 13-18.

Accompanied by a business delegation from Singapore, the High Commissioner met Foreign Minister Ali Sabry on Tuesday and he is to meet a number business and trade related officials.

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Lanka’s 2023 budget to seek way out of current crisis

As Sri Lanka struggles with the worst-ever post-independent economic crisis, President Wickremesinghe noted that his full-year budget included many unpopular economic proposals…writes SUSITHA FERNANDO

Presenting Sri Lanka’s Budget for 2023, President Ranil Wickremesinghe said on Monday that his country has resumed efforts to integrate with key markets such as India and China in order to expand its market access.

“It is essential that Sri Lanka expands its market access whilst developing domestic supply capacity. Global trade is today driven by regional and global production networks such as ASEAN, where Sri Lanka has not yet been fully engaged to obtain benefits. Policy measures will therefore focus on enhancing Sri Lanka’s ability to compete in global markets through innovation, efficiency, and quality,” he said.

Anticipating an International Monetary Fund (IMF) $2.9 billion bailout, Wickremesinghe said that negotiations are currently in progress and the government is “in dialogue with India and China on debt restructuring”.

“We are confident that these discussions will lead to positive outcomes,” he said.

In September, Sri Lanka clinched a deal with the IMF for a 4-year $2.9 billion extended fund facility but it is subject to debt restructuring with the creditors.

As Sri Lanka struggles with the worst-ever post-independent economic crisis, President Wickremesinghe noted that his full-year budget included many unpopular economic proposals.

“We lost our way because of taking that popular route. Now we can no longer go down
wrong paths and despair. We are not having a wedding by being in debt to the world. What
we are doing with this budget is to lay a foundation that we can stand on our own strength.”

Wickremesinghe, who took over the presidency from Gotabaya Rajapaksa who fled the country in July when angry protestors stormed President’s house following economic crisis with shortages of all essentials including food, fuel and medicine, presented an interim budget in August for the rest of 2022.

For 2023, he has planned a budget with ambitious goals for high economic growth of 7 to 8 per cent, increasing international trade as a percentage of GDP by more than 100 per cent, annual growth of $3 billion from new exports from 2023 to 2032, foreign direct
investment of more than $3 billion in the next 10 years and creating an internationally
competitive workforce with high skills in the next ten years.

Wickremesinghe’s budget also plans to bring the inflation, which hit record 73.7 per cent in October, back under control to a mid-single digit level in the medium term.
It further expects to increase government revenue to 15 per cent of GDP by 2025 from the 8.3 per cent of GDP as at end 2021 and reduce public sector debt from around 110 per cent of GDP as at end 2021,to no more than 100 per cent of GDP in the medium term.

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‘There shouldn’t be any threat to India’

During his address, Wickremesinghe also noted that Sri Lanka will become the first country in Asia that is preparing legislation for undersea cables…reports Susitha Fernando

Sri Lanka President Ranil Wickremesinghe reiterated that whatever superpower enters the Indian Ocean, there should not be any threat to India.

Wickremesinghe said that Sri Lanka would not be a party to big power rivalry, specially in the Indian ocean, and at the same time there won’t be any objection whether the US, Japan or China being there as long as there is no any threat to Sri Lanka and India.

“The total competition in the world has gone from US and Russia to US and China,” the President added on Friday addressing the General Convocation of the General Sir John Kotelawala Defence University in Colombo.

“Whether the US is in the Indian Ocean, we have no objections. We have no objections to the Japanese or the Chinese being there, as long as there is no rivalry. We are the littoral states, and we have to look after our interests. The largest of them is India, and being the largest littoral state, India would like very much to ensure that there is no threat to them. We all accept that there should not be any threat to littoral states. It should not lead to a competition or threat that would lead to a rivalry among all of us,” Wickremesinghe said.

“We are a country that comes under pressure for many things, for things which we have not done and we are not responsible for, and often imagined threats of others. We should not allow any country to think that we are a threat to them,” he added.

During his address, Wickremesinghe also noted that Sri Lanka will become the first country in Asia that is preparing legislation for undersea cables.

In October, Wickremesinghe making a speech at the conference “The Indian Ocean: Defining our Future” stressed that “each littoral nation should commit in strengthening the mechanism based on common law in the Indian Ocean region”.

“There he emphasised that maintaining freedom of navigation in the sea lanes of communication
in the Indian Ocean are of paramount importance in global trade and pointed out that the cables
laid beneath the Indian Ocean should be secured. Situated in the middle of the Indian Ocean, Sri Lanka sees the need to start examining these issues in depth as much of the undersea cable connectivity between West and East travels over the seabed adjacent to Sri Lanka,” the President said.

“We want to ensure the freedom of digital connectivity not only as an Indian Ocean objective,
but as a global objective,” he added.

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TN fishermen on strike after SL Navy seizes boats

Fishermen were fishing in the Gulf of Mannar between Dhanushkodi and Thalaimannar at night when the Sri Lankan navy came to the area claiming to have crossed the border…reports Asian Lite News

After the Sri Lankan navy apprehended Indian fishermen and boats, Rameswaram fishermen associations decided to hold a three-day strike to condemn inaction by state and central governments, said Fishermen Association District Secretary Jesuraj.

The fishermen have condemned the Central and State Governments for not taking any action to stop the ongoing transgressive activities of the Sri Lankan Navy, added the District Secretary.

In this regard, in an emergency meeting of Fishermans Associations held at Rameswaram fishing harbour today.

Earlier today, 15 Rameswaram fishermen and two boats were apprehended by the Sri Lankan Navy.

Fishermen went to sea from Rameswaram yesterday to fish in 534 barges after obtaining a fishing permit from the Fisheries.

Fishermen were fishing in the Gulf of Mannar between Dhanushkodi and Thalaimannar at night when the Sri Lankan navy came to the area claiming to have crossed the border.

The Sri Lankan Navy has detained 22 Indian fishermen from Nagapattinam and Karaikal districts of Tamil Nadu. (Credit: Twitter/ @srilanka_navy)

The arrested fishermen and boats are being taken to Thalaimannar Naval Camp for questioning. This has created turmoil among Rameswaram fishermen.

Last week, the Supreme Court was informed by the Centre that 68 Indian fishermen, caught by Sri Lankan Navy in December 2021, have been released and repatriated to the country.

A bench of Justices Aniruddha Bose and Vikram Nath while taking into note the status report filed by the Centre closed that case which sought direction to the Centre to negotiate with the Sri Lankan government authorities to release the arrested Indian fisherman and their mechanised boat.

“We have perused the status report filed on behalf of the Union of India supported by an affidavit dated October 28, 2022. It has been stated in this report that all the 68 Indian fishermen who were apprehended between 18th to 20th December 2021 by Sri Lankan Navy, have been released and repatriated to this country. In such circumstances, we do not find any reason to keep the present petition pending. Accordingly, the same is disposed of,” the bench stated in its order.

The top court was hearing a plea filed by one KK Ramesh regarding the arrested fishermen and 10 boats which have been seized by the Sri Lankan Navy in December 2021 on the grounds of crossing the International Maritime Boundary Line while fishing.

The petition also stated that more than 100 fishermen have been illegally arrested and kept in Sri Lankan prisons where they are ill-treated, which is a violation of Human Rights.

During the hearing when the petitioner’s counsel asked the court to look into the issue regarding the marine boundary between India and Sri Lanka which has resulted in such incidents, the bench said that it cannot get into the issues regarding international treaties.

On the request of the advocate to pass directions regarding the release of the mechandised boats of the fishermen, the apex court asked him to approach the jurisdictional court. (ANI)

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Lanka President thanks Indian community for efforts during crisis

“I must say I was following your activities. So all I can say is that in a moment of darkness in Sri Lanka, you are one of the lamps that have been lit,” said the President…reports Ashoke Raj

Sri Lankan President Ranil Wickremesinghe lauded the Indians living in Colombo and other parts of Sri Lanka known as Colombo Expats Cultural Association (CECA) and their efforts towards the crisis-hit country during the COVID pandemic and economic fallout.

President Ranil Wickremesinghe during his speech highlighted how CECA has helped Sri Lanka in its darkest moment by illuminating the lives of underprivileged children during the crisis situation. He appreciated CECA’s continued involvement and commitment to Sri Lanka.

“I must say I was following your activities. So all I can say is that in a moment of darkness in Sri Lanka, you are one of the lamps that have been lit,” President Ranil Wickremesinghe said.

Moreover, Wickremesinghe also emphasised how Sri Lanka and India share a similar culture in the region.

“India and Sri Lanka are two sides of the coin and while both countries have their differences in culture and religion, there are commonalities,” President Ranil said.

Recently CECA organised a cultural event and fashion show on the occasion of Diwali. During the event, the President of Sri Lanka and the High Commissioner of India to Sri Lanka, Gopal Baglay participated in making the event more memorable.

During the Sri Lanka Crisis, Standing in solidarity with the people in Sri Lanka, Colombo Expats Cultural Association (CECA) donated dry rations worth SLR 80 million to the Department of Probations and Child Care Services. CECA completed this massive donation end to end and ensured all the dry ration was delivered to the orphanages with a personal touch.

“CECA undertook a massive food donation drive when it received a request from the Ministry of Children Probation to support the orphanages struggling due to the economic crisis. CECA strategized this drive to support 10,600 children across 300 orphanages with 100 days of dry ration, including rice, pulses, potato and onions,” CECA said in a statement.

People in Sri Lanka once again protested high taxes, inflation and perceived state-led repression in Colombo. Sri Lanka currently faces its worst economic crisis in seventy years, leading to shortages of food, medicine and fuel. The island nation’s worst economic crisis in seven decades led to a shortage of foreign exchange that stalled imports of essential items such as fuel, medicine, and fertilizer. (ANI)

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India upset as Lanka fuels China’s warships on the sly

It was noticed that Sri Lankan vessels were loading fuel from Hambantota port and refuelling Chinese warships on the high seas despite Indian and US concerns on the issue, the report points out…reports Asian Lite News

India has expressed serious concerns to Sri Lanka as the island nation’s tankers have been secretly refuelling Chinese Navy vessels on the high seas.

“New Delhi has asked Sri Lanka to come up with transparent standard operation procedures (SOPs) for refuelling and docking of ships and not allow Chinese military vessels to either dock or refuel at Hambantota or Colombo ports,” according to a report in the Hindustan Times based on information provided by diplomats in Colombo.

It was noticed that Sri Lankan vessels were loading fuel from Hambantota port and refuelling Chinese warships on the high seas despite Indian and US concerns on the issue, the report points out.

India has been rising to the occasion to provide fuel, food and medicines to Sri Lanka during the worst days of its economic crisis. However, Colombo does not appear to be living up to its promise when it comes to New Delhi’s sensitivities on the China issue.

Chinese warships have been using the anti-piracy pretext to deploy its warships off the coast of East Africa and the Gulf of Aden even though there is little or no pirate activity in the region. Refuelling of these ships by Sri Lanka helps them to continue with these operations which are emerging as a threat to peace in the Indian Ocean region.

The Sri Lanka government earlier bowed to Beijing’s arm-twisting in letting Chinese spy ship Yuan Wang 5 to dock at Hambantota despite India’s objections. Both India and the US had made it clear to Colombo that it should desist from extending any logistical support to Chinese Navy vessels.

While China’s so-called research vessels such as Yuan Wang 5 are said to be carrying out hydrological surveys and metal prospecting, they are actually monitoring satellite activity and missile test firing in the region with a focus on India, US and Australia. This is an issue of serious concern.

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Lanka to import food aid from Indian LOC

Sri Lanka’s Treasury is to inform India the essential items by next week…reports Asian Lite News

Facing a severe food crisis, Sri Lanka has decided to import some essential food items from a total of $120 million remaining from the Indian Line of Credit (LOC) that was given to purchase various other items but remained unutilised so far.

A selected number of essential food items are planned to be imported out of $1 billion LOC extended in March this year. The LOC had been extended for the procurement of food, medicines, and other essential items from India.

Trade, Commerce, and Food Security Minister Nalin Fernando told media that the requirement of essential food items have been forwarded and awaiting the response. The food requirements also to be forwarded to the committees appointed to study the Indian LOC through the Finance Ministry, he added.

Sri Lanka’s Treasury is to inform India the essential items by next week.

Media reports indicated that nearly 40 per cent of the Indian LOC still remained unutilised, though the country has a shortage of many essential items. Affected by shortage of some of the essential medicines, the Health Ministry had recently expedited the procurement of medicines using the Indian LOC. However depending on most of the imported food items, the country is facing severe shortages of many food items.

Releasing the Complex Emergency Needs Assessment Report on Sri Lanka’s worst ever economic crisis since independence in 1948, the International Federation of Red Cross last week revealed that 96 per cent of Sri Lankans have been affected by the crisis with some pressing issues of food insecurity, health concerns, livelihoods, and nutrition.

“The deepening economic crisis is forcing people to make heart-breaking choices between going hungry, buying life-saving medicine, or finding the money to send children to school,” the report, prepared after surveying 2900 households and case studies of 10 estates in the tea plantation sector where most low waged poor reside, stated.

The report has noted that Sri Lanka is experiencing a “worryingly high problems of access to food, either because of high cost, income stress or lack of availability. Runaway inflation and loss of livelihoods have doubly impacted people’s ability to cope with the record cost of living. Income loss is causing significant food insecurity, while inflation is driving up the cost of medicine and fuel costs are preventing access to essential healthcare”.

It warned that without immediate humanitarian interventions, the impact on communities in the Indian Ocean Island is likely to be long-lasting and cumulative.

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Ranil stresses need for high taxes despite protests

Making a special statement televised on Wednesday night, President Wickremesinghe said that it was not possible to strengthen the economy without increasing the revenue of the country…writes Susitha Fernando

Stressing the urgent need to impose high taxes despite mounting public protests, Sri Lankan President Ranil Wickremesinghe warned that the country would have to revert to an ‘era of queues’ if revenue is not raised through a direct tax increase.

Making a special statement televised on Wednesday night, President Wickremesinghe said that it was not possible to strengthen the economy without increasing the revenue of the country, which will compel him to reluctantly make tough decisions in order to rebuild the nation.

However political parties, academics, activists and people have warned against the decision to increase taxes, specially at a time when the country going through a severe economic crisis. Opposition parties have warned that people would be called to streets if the tax hike is introduced.

Facing a massive inflation and dollar crunch, Sri Lanka awaits an International Monetary Fund (IMF) bailout of $3.8 billion within a period of four years as a measure to come out of the economic calamity. One of the main IMF conditions is to exceed 20 per cent of direct tax revenue and the government is to tax everyone who earns more than Rs 100,000 (around $275) a month.

“The agreed goal is to achieve 14.5 per cent- 15 per cent of Gross Domestic Product (GDP) revenue by 2026,” Wickremesinghe said.

“If Sri Lanka withdraws from this programme, IMF assistance will not be received. Without IMF certification, the support of these international financial institutions such as the World Bank, Asian Development Bank, and the countries that have been supported financially will not be forthcoming. If that happens, the country will be back to the era of queues,” President stated.

He said that tougher times ahead will have to be faced. “Therefore, these loans need to be obtained and embark on a debt-restructuring programme. These decisions are not being taken wilfully, but are being done reluctantly. However, these decisions will be reconsidered periodically,” the President told the people.

IMF urges Lebanon to implement ‘agreed-upon’ reforms



During his address, President Wickremesinghe also said that as an important step in Sri Lanka’s debt restructuring programme, a meeting had been convened last week by the IMF with the aim of bringing the three main countries Japan, China and India, which have granted loans to Sri Lanka, on a common platform to discuss the future steps in the formulation of concessions.

“India and China have informed that they will examine the issues further and respond accordingly. These two countries have also informed the possible need for bilateral discussions in this regard,” President Wickremesinghe said in a televised public statement.

Wickremesinghe blamed the last government run by Gotabaya Rajapaksa charging that the country lost Rs 700 billion (nearly $1.9 billion) due to wrong economic policies and the inflation rate increased to 70 per cent since Rs 2,300 billion ($6.2 billion) was printed during the past two and a half years.

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Sri Lanka SC orders to summon Gotabaya on rights case

Gotabaya, who served as Defence Secretary when the two men disappeared was prior asked by the Jaffna Magistrate’s Court to appear in court on 27th September and provide evidence…reports Asian Lite News

Sri Lankan Supreme Court on Wednesday has given orders to summon former president Gotabaya Rajapaksa over the disappearance of two human rights activists in 2011 as he is now out of constitutional powers.

The order was issued after taking up for consideration a petition filed by the relatives of human rights and political activists, Lalith Weeraraj and Kugan Murugananthan who went missing on December 9, 2011, when Gotabaya Rajapaksa was serving as the Defence Secretary, NewsWire reported.

Gotabaya, who served as Defence Secretary when the two men disappeared was prior asked by the Jaffna Magistrate’s Court to appear in court on 27th September and provide evidence.

However, the former president dodged the court’s orders and claimed danger to his life if he were to appear in court to provide the evidence, according to NewsWire. He later filed a motion at the Court of Appeal, seeking an order to suspend the order of the Jaffna Magistrate’s Court in the disappearance case.

Later, Gotabaya was elected as the President of Sri Lanka when the verdict was announced on the disappearnce case, however, he was freed from summoning due to his title and the constitutional powers that followed.

As soon as he resigned from his position due to the crisis in the country, the family of victims filed the petition, hearing which the Supreme Court on Wednesday instructed the lawyer representing the petitioners to issue a new notice to former President Gotabaya Rajapaksa to appear before the court to provide evidence.

The Supreme Court also fixed the next hearing of the petition for 15th December 2022, NewsWire reported.

The former president fled the county following mass agitations calling for his resignation on July 9. Rajapaksa fled Sri Lanka in the early hours of July 13 after massive protests erupted in Colombo and demonstrators angry with the country’s economic crisis stormed his official residence and office.

He resigned as president after reaching Singapore, where he was issued a 14-day visit pass.

He had fled to Singapore via the Maldives and then spent a few weeks in Thailand. He returned to Sri Lanka almost after two months after fleeing to Thailand.

Sri Lanka is suffering its worst economic crisis since gaining independence in 1948, which comes on the heels of successive waves of COVID-19, threatening to undo years of development progress and severely undermining the country’s ability to achieve the Sustainable Development Goals (SDGs). (ANI)

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