Economic

Sri Lanka is set to devise and implement a strategy to improve the capability in obtaining formal financial services at a bearable cost to all the individuals and entrepreneurs in the society, Central Bank sources said.

Sri Lanka’s commercial banks have disbursed Rs.120 billion among tourism sector personnel and institutions affected by bomb attacks targeting churches and luxury hotels in Colombo on Easter Sunday last year, a senior Central Bank (CB) official disclosed.

As Sri Lanka braces for the impact of novel coronavirus COVID-19, the Central Bank yesterday said it has adjusted growth to a margin of 3.5-4% from an earlier 3.7-4.5% projection, and called on banks to transfer benefits from the last round of rate cuts to businesses faster, to counter the virus’s impact, which could be felt on a range of sectors.

අද පෙරවරුවේ අත්හිටවූ කොළඹ කොටස් වෙළඳපොල යළි සක්‍රීය තත්වයට පත්ව තිබෙනවා. ඒ අනුව සාමාන්‍ය පරිදි ගනුදෙනු සිදුවන බවයි වාර්තා වන්නේ.

Sri Lanka Board of Investment (BOI) has failed to attract Foreign Direct Investment in the recent past as the island anion’s investment promotion agency which had been carrying out this task for 28 long years.

The new Acting General Manager of Bank of Ceylon Sudath Gunasekara yesterday assumed office whilst at People’s Bank it was Bonniface Silva and not K.B. Rajapakse as earlier reported by Daily FT.

Sri Lanka government as the sole authority of Ceylon Petroleum Corporation is now compeled to bring down the prices of fuel as world oil prices were on track for a decline after Saudi Arabia shocked the market by launching a price war against onetime ally Russia.

Necessary regulatory initiatives have been taken by the Central Bank to treat several ailing Non Bank Finance Institutions (NBFI) and infuse new capital, senior Central Bank official revealed.

Inbound tour operators likely to offer packages targeting Indian tourists
Hotels to target local travellers following cancellations, forward bookings bleak
Tourism industry stakeholders met yesterday for the first time to assess the impact of COVID-19 and discuss the way forward.

Sri Lanka Telecom PLC (SLT) concluded the financial year 2019 on a high note, with 28 per cent YoY growth in Profit after Tax (PAT) at Rs. 6.3 billion.

Construction work on major mega projects in Colombo as well as highway projects which employ Chinese workers has come to a standstill since the corona virus outbreak, with Sri Lankan workers refusing to report to work while Chinese workers have been asked to stay indoors, construction industry sources said.

The Elections Commission (EC) yesterday announced that applications for postal voting will close on 16 March and called on public servants to submit their applications to relevant officials as early as possible.

The government has not presented tax amendment bills in parliament and some tax relief initiatives have not been enacted up to now, but the Inland Revenue Department (IRD) is enforcing some of these new amended taxes hoping to get approval from parliament with retrospective effect.

Cash strapped SriLankan Airlines is temporarily suspending its services between Sri Lanka and China from 10th March to 30th April 2020 due to current market conditions driven by significant reduction in worldwide travel to and from China.

Major stakeholders of the apparel industry will meet today for a crucial discussion to find ways to counter the double impact of the coronavirus outbreak, as the sector struggles with both disrupted supply chains and slower demand in key export markets with initial estimates indicating the impact could reach as much as $ 500 million.

Early stages of data collection indicate an impact of $ 200 million to $ 500 million on the apparel industry as a result of the coronavirus outbreak due to the unavailability of raw materials, although the apparel exports industry is yet to identify the impact of the drop in orders, especially from European markets.

Representatives from the industry are expected to meet later today to discuss how extensive the impact of the coronavirus outbreak on the industry is and if the industry will have to make any requests from the Government for special assistance or support. The industry is expected to present its proposals to the relevant authorities after the meeting.

The original impact of the coronavirus outbreak was on the supply of raw materials, Sri Lanka Apparel Exporters Association Chairman Rehan Lakhany told the Daily FT, explaining that Sri Lanka depends on China for raw materials.

“There have been some major delays in shipments for supplies from China and the impact has been different from factory to factory and customer to customer,” he said. This has also resulted in a backlog, which is further impeding the local apparel industry.

The impact may be felt until mid-May or even beyond May and there is a lot of uncertainty within the industry regarding the impact of the coronavirus outbreak.

“Some Chinese suppliers have said they started production and the factories have opened but we hear that they are not operating with a full labour force,” Lakhany said, adding, “Due to that, we expect that production won’t be at the usual level.”

While alternative sources for raw materials seem like a solution, Lakhany said that there were certain limitations to this.

“It takes a long time to develop those sources and technology,” he said, adding that alternative sources for certain raw materials cannot be found outside China.

“All garment manufacturing countries like Vietnam and Cambodia are looking at alternative sources and they are all going to these limited sources. There is a limited capacity,” he said, adding that there was going to be a shortfall given the sudden increase of demand from sources with a low supply.

Sri Lanka’s finance and leasing sector will face added pressure for consolidation as deadlines for the implementation of tougher capitalisation requirements approach in 2021, Fitch Ratings predicted .

A Pre-election Budgetary Position Report containing information on the fiscal position of the country will have to be published by the ministry in terms of the section 16 (1) of the Fiscal Management (Responsibility) Act No. 2 of 2003 as amended.

With the rapid deployment of digital services and expansion of e-Government initiatives to deliver citizen services in the country, electronic transactions in Sri Lanka will grow substantially in the near future. This increases the probability of identity theft, financial fraud and other security breaches. Therefore, the requirement to authenticate citizens as well as organisations involved in digital transactions becomes pivotal.