Author Archive for Economy

Sri Lanka will need structural reforms for debt sustainability

Monday, May 23rd, 2022

Courtesy Mint An IMF bailout would depend on the country fixing its economy. High school teacher S. Jeeva spent two days in the hot sun lining up for cooking gas in Sri Lanka’s capital. He’s been standing with thousands of others waiting for a delivery that so far hasn’t come. Many of his students have […]

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Sri Lanka picks Lazard, Clifford Chance as advisers for landmark debt restructuring: Report

Monday, May 23rd, 2022

Courtesy CNA COLOMBO/LONDON: Sri Lanka has hired heavyweight financial and legal advisers Lazard and Clifford Chance as it prepares for the difficult task of renegotiating its debts, a trio of sources told Reuters on Monday (May 23). The move is the latest development in Sri Lanka’s worst economic crisis since independence from Britain in 1948 […]

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SAARC Chamber urges IMF for timely bail out package to Sri Lanka

Monday, May 23rd, 2022

Courtesy Pakistan Observer President SAARC Chamber of Commerce and Industry Iftikhar Ali Malik Sunday urged the International Monetary Fund (IMF) to work out timely bail out package to put defaulting Sri Lanka, a financially crumbled country, on track. Talking to a delegation of women entrepreneurs led by Noreen Asim Siyal-an emerging youtuber, he said that […]

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Inflation in crisis-hit Sri Lanka hits new record

Monday, May 23rd, 2022

Courtesy MailOnLine +1View gallery A woman sits beside liquefied petroleum gas cylinders on a street in Colombo. Fuel is in short supply across Sri Lanka Sri Lanka’s inflation hit a seventh consecutive record high in April as a petrol shortage worsened and food prices rose sharply, official data showed Monday. The National Consumer Price Index […]

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The Role of the Currency Board in Bulgaria’s Stabilization

Saturday, May 21st, 2022

Anne-Marie Gulde  Courtesy IMF Bulgaria’s latest stabilization program, which included the introduction of a currency board, marked the end of a period of economic turmoil and near-hyperinflation. What accounts for its success? After several failed stabilization attempts, Bulgaria introduced a currency board on July 1, 1997. Controversial and difficult to implement because of Bulgaria’s serious […]

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What is a currency board?

Saturday, May 21st, 2022

IMF A currency board combines three elements: a fixed exchange rate between a country’s currency and an “anchor currency,” automatic convertibility, and a long-term commitment to the system, often made explicit in the central bank law. The main reason for countries to consider a currency board is to demonstrate that they are pursuing an anti-inflationary […]

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Sri Lanka is in a death spiral – Economist

Saturday, May 21st, 2022

By Dilini Madushanki Courtesy Ceylon Today The Sri Lankan economy is in a death spiral”, says world-renowned economist Steve H. Hanke, a professor of applied economics, at Johns Hopkins University in Baltimore. He said in a Twitter message that this was the first time Sri Lanka had defaulted on a debt. Hanke pointed out that […]

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World Bank, ADB & AIIB announce joint plan to aid Sri Lanka

Saturday, May 21st, 2022

Courtesy Adaderana The World Bank, the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) have jointly decided to support Sri Lanka’s response to the ongoing economic crisis. The three institutions announced their decision in a statement issued after the first joint coordinated meeting held on the 19th of May. All three institutions […]

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Sri Lanka could face food shortage from August, warns prime minister

Friday, May 20th, 2022

Courtesy Scroll The island nation shut down schools and asked public authorities not to commute to work in an attempt to mitigate the fuel crisis. Sri Lanka’s newly elected Prime Minister Ranil Wickremesinghe on Friday said that the crisis-hit island nation is likely to face a potential food shortage from August, NewsWire reported. The development came as Sri […]

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Governor of the Central Bank of Sri Lanka (CBSL)optimistic about controlling runaway inflation

Friday, May 20th, 2022

By Shyam Nuwan Ganewatta Courtesy The Island Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe yesterday (19) said there was some political and social stability in the country and it would help the CBSL achieve some success in its endeavours. Dr. Weerasinghe said so responding to a question posed by a […]

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Central Bank to crack down on foreign currency note holders

Friday, May 20th, 2022

Courtesy The Daily Mirror o bring down the threshold to US$ 10, 000 from US$ 15, 000 Says move will enhance dollar liquidity in domestic forex market Says evidence suggests people hoarding large amount of forex in note form in their homes and offices As of now any individual can hold up to US$ 15,000 […]

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IMF says Sri Lanka talks conclude May 24, monitoring developments closely

Thursday, May 19th, 2022

Courtesy Reuters May 19 (Reuters) – An International Monetary Fund virtual mission to Sri Lanka is expected to conclude technical talks on a potential IMF loan program to the crisis-wracked South Asian country on May 24, Fund spokesman Gerry Rice said on Thursday. Rice, speaking to a virtual IMF briefing, said the IMF monitoring political […]

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Reserve Bank of India approves India, Sri Lanka trade settlement in rupee outside ACU

Thursday, May 19th, 2022

Courtesy Business Standard Regulatory nod only for State Bank of India’s term loan of $1 billion for island nation battling economic crisis. The Reserve Bank of India (RBI) has approved trade transactions between India and Sri Lanka to be settled in Indian rupee outside the Asian Clearing Mechanism. The approval is alongside a government-guaranteed $1 billion term loan from […]

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Fitch downgrades Sri Lanka’s rating to ‘restricted default’

Thursday, May 19th, 2022

Courtesy CNA Ratings agency Fitch on Thursday downgraded Sri Lanka’s rating to ‘RD’ from ‘C’ after the grace period expired on coupon payments that were due on Apr 18 on two international sovereign bonds. “We have affirmed Sri Lanka’s Long-Term Local-Currency IDR at ‘CCC’, as the government has continued to service local-currency debt and we assume […]

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G-7 backs debt relief efforts for Sri Lanka, draft communique shows.

Thursday, May 19th, 2022

Courtesy The Straits Times KOENIGSWINTER, GERMANY (REUTERS) – The Group of Seven economic powers support efforts to provide debt relief for Sri Lanka, G-7 finance chiefs said on Thursday (May 19) in a draft communique from a meeting in Germany after the country defaulted on its sovereign debt. The once-booming island country has suspended debt payments […]

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Sri Lanka to repay debts after six months

Thursday, May 19th, 2022

Courtesy Borneo Bulletin COLOMBO (AFP) – Sri Lanka will take at least six more months to start repaying its debts, the central bank said yesterday as the government shut schools because of fuel shortages. Central Bank of Sri Lanka Governor Nandalal Weerasinghe said there will be no debt servicing until the country was able to […]

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The Reserve Bank of India allows settlement of government-backed $1 billion credit facility to Sri Lanka in rupee terms

Thursday, May 19th, 2022

Courtesy The Daily Mirror The Reserve Bank of India (RBI) on May 19 said that the government of India-backed $1 billion term loan granted to Sri Lank through the State Bank of India (SBI) for financing purchase of essential goods can be settled in rupee terms, outside the purview of the Asian Clearing Union (ACU) […]

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More pain in Sri Lanka before any resolution to crisis

Wednesday, May 18th, 2022

By Jorgelina do Rosario and Swati Bhat Courtesy FXEmpire By Jorgelina do Rosario and Swati Bhat (Reuters) -Running out of petrol, medicines and foreign reserves, once-booming Sri Lanka is in a mess. And the measures needed to pull its economy out of the unparalleled crisis are likely to bring even more pain.Advertisement 71% of retail […]

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JPMorgan backs Sri Lanka bonds on bets that crippling crisis to ease

Wednesday, May 18th, 2022

Courtesy Reuters LONDON, May 18 (Reuters) – U.S. investment bank JPMorgan backed Sri Lanka’s crisis-hit government bonds on Wednesday, saying recent political changes in the country should gradually improve its strains and help its talks with the International Monetary Fund. Adding an ‘overweight’ – effectively a buy recommendation – JPMorgan analysts said: “political stability should […]

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Sri Lanka to default on debt, no money for fuel: minister

Wednesday, May 18th, 2022

Courtesy The Daily Star Sri Lanka was expected to be placed into default by rating agencies on Wednesday after the non-payment of coupons on two of its sovereign bonds, while the energy minister said the country had run out of money to pay for fuel. An economic crisis unprecedented in the country’s history since independence […]

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Shouldn’t Sri Lanka have defaulted on the settlement of the ISB of USD 500 million on 18th January 2022? Wouldn’t that have saved the Forex for the import of essential items?

Tuesday, May 17th, 2022

State of Sri Lanka’s Economy – Research Team Defaulting debt is a very complicated and painful matter. It is not a casual or frivolous matter. It is well known that various people had suggested to the Sri Lankan authorities at various times to default on its external public debt. They gave various reasons as to […]

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“Gravitas Plus: Which countries could go the Sri Lanka way” on YouTube

Monday, May 16th, 2022

WION Sri Lanka’s debt crisis is a warning to the world. The World Bank says a global debt storm is coming. It could engulf 70 developing countries & make their economies fall like dominoes. What are the threats they face? How can they be averted? Palki Sharma explains.

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Sri Lanka out of petrol as economic crisis deepens

Monday, May 16th, 2022

ByMary Izuaka Courtesy Premium Times The Indian Ocean Island nation faces its worst economic crisis since independence in 1948. Sri Lanka’s newly appointed prime minister, Ranil Wickremesinghe, announced Monday that the country has run out of petrol stock. Reuters reports that Mr Wickremesinghe disclosed this in an address to the nation amid uncertainties over fuel […]

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Not going to IMF then & going to IMF now : Will Sri Lanka’s Problems be solved?

Saturday, May 14th, 2022

State of Sri Lanka’s Economy – Research Team Since early 2020, the Gotabaya Rajapaksa government appeared to implement a plan with several components for the external sector. These components included securing of multi-lateral and bi-lateral loans, monetization of selected assets, obtaining Central Bank SWAPs, promoting Hambantota Industrial & Pharmaceutical Zones, Colombo Port City and other […]

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Lines of credit extended to Sri Lanka may go through rough patch: Exim Bank

Thursday, May 12th, 2022

Courtesy Business Standard Export Import Bank of India (Exim Bank), however, said there is no overdue payment from the Sri Lankan government as of now The lines of credit extended to the Sri Lankan government by India Exim Bank may go through a “rough patch” as the island nation faces the worst economic crisis, a senior bank […]

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Sri Lanka: Debt Crisis, Neocolonialism and Geopolitical Rivalry

Wednesday, May 11th, 2022

By Asoka Bandarage Courtesy Inter Press Service World Bank, Washington DC.The multilateral Asian Development Bank and the World Bank owns 13% and 9% of Sri Lanka’s foreign debt, respectively. WASHINGTON DC, May 11 2022 (IPS) – Sri Lanka is in the throes of an unprecedented economic crisis. Faced with a shortage of foreign exchange and defaulting on […]

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IMF and the Sri Lanka bailout drama

Friday, May 6th, 2022

By Kandaswami Subramanian Courtesy The Indian Express How many more International Monetary Fund programmes will Lanka need to put itself through to reach that manna of economic stabilisation? This is not the first time that Sri Lanka has come out of a battle with the International Monetary Fund (IMF). It is sufficiently battle-scarred over the years […]

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Sri Lanka to replace ‘unrealistic’ budget, in talks to extend World Bank aid

Wednesday, May 4th, 2022

Courtesy NewsIn.Asia May 5 (Reuters) – Sri Lanka plans to replace its current unrealistic” budget and is in talks with the World Bank to extend its support by $300 million to $700 million, the country’s finance minister said on Wednesday. The island nation, hit hard by COVID-19 and short of revenue after steep tax cuts […]

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Sri Lanka’s foreign liquidity reserves critically low, govt planning new budget: Sabry

Wednesday, May 4th, 2022

Courtesy Adaderana Minister of Finance Ali Sabry, delivering a special statement in parliament today (May 05), revealed that Sri Lanka’s foreign liquidity reserves, which amounted to USD 7.6 billion by the end of 2019, have dropped to a critically low level below USD 50 million. Speaking further, the lawmaker said the reserves declined to USD […]

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USD selling rate hits Rs. 370 at several banks

Wednesday, May 4th, 2022

Courtesy Adaderana UPDATE: The Central Bank of Sri Lanka (CBSL) has announced the official exchange rates of the US Dollar. Accordingly, the selling rate of the USD is listed as Rs. 350.05 and the buying rate is Rs. 362.99, according to the central bank.  Several licensed commercial banks in Sri Lanka today (May 04) announced their […]

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