Economic

Department of Census and Statistics reveal food inflation up 21.5% in December from 17% in November
Headline inflation up 14% in December as opposed to 11% in November
SL suffers spike amidst decline in food prices globally in December according to the FAO

Locals’ optimism propels market capitalisation to over Rs. 6 t
Persistent negativity sees net foreign selling cross Rs. 2 b mark within weeks of New Year

The value of the Employees Provident Fund (EPF) listed equity portfolio has increased to Rs. 112 billion as opposed to its cost of Rs. 84 billion, reflecting an unrealised gain of Rs. 28 billion, the Central Bank revealed yesterday.

Six importers have already been granted approval to import Molnupiravir, the oral antiviral pill to treat Covid patients, Dr. Saman Ratnayake, Secretary to the State Ministry of Drug Production, Supply and Regulation said yesterday.

Central Bank Governor Nivard Cabraal has commended the outgoing Secretary to the President Dr. P.B. Jayasundera.

Workers’ remittances in 2021 via banking channels have declined to a 10-year low, sparking fresh concerns over Sri Lanka’s biggest net foreign exchange earner.

Ups policy rates by 50 basis points; first time after August last year
Expects corresponding increase in interest rates, particularly in deposit rates, thereby encouraging savings while discouraging excessive consumption, which also fuels imports
Says anticipated adjustment in market interest rates will facilitate reduction in Treasury bill holdings of Central Bank through increased market subscriptions
Allows private banks to finance essential import bills for fuel purchases in proportion to their foreign exchange inflows
Mandates all registered tourist establishments to accept forex only in respect of services rendered to persons residing outside Sri Lanka
Extends ongoing Rs. 10 per dollar incentive for channelling remittances via banking channels till end-April; to reimburse Rs. 1,000 per remittance transaction
To offer higher interest rates for both foreign currency and rupee-denominated deposits of migrant workers
Estimates economy grew by 4% in 2021; forecasts 5% growth this year
Exports hit a record of $ 12.4 b in 2021; imports swell to $ 20.6 b

Central Bank Governor Ajith Nivard Cabraal yesterday called on the banking sector to be agile in order to “stay the course” and fuel confidence and economic stability to steer through the challenging times.

REUTERS: Sri Lankan shares extended gains to a second session yesterday, closing more than 1% higher as financial and industrial stocks advanced.

Dr. Prasantha Jayamanna yesterday assumed duties as the Chairman of Sri Lanka Ports Authority (SLPA) following the appointment by Ports and Shipping Minister Rohitha Abeygu-nawardena.

The Colombo stock market opened a fresh week on a positive note with both indices up on robust turnover.

Russia, India, Ukraine, UK and Germany among top source markets
Sri Lanka Tourism Chief Kimarli Fernando says future trend uncertain amidst COVID pandemic
Asserts SL need to ‘ride with the tide’ to sustain industry
Cancellations from EU and India amidst global Omicron threat
SLTDA Director General Dhammika Wijayasingha says average tourists stay has extended to 14 or more, from 10 days
Most tourists come for wellness tourism, vaccination with family

The tourism industry yesterday welcomed the Central Bank’s decision to allow registered tourist establishments to accept foreign currency for services.

Boosts services with 26 weekly flights
Emirates Area Manager Chandana De Silva says Sri Lanka is a key market, proud to support trade and tourism recovery
Opines additional flights will provide more space for export cargo, essential imports like pharmaceuticals

The COVID-hit tourism industry has managed to rebound with earnings of over $ 500 million in 2021. “Tourism holds a greater significance in the services sector and has been a driver of growth for the economy. The industry was the most vulnerable to COVID-pandemic, but it has proven again its resilience with remarkable resurgence. The year ended with 194,495 tourists, with earnings surpassing the target of $ 500 million,” Sri Lanka Tourism Development Authority (SLTDA) Director-General Dhammika Wijayasingha told the Daily FT.

Access Group has been selected by the Government for a Build, Operate and Transfer (BOT) deal for a logistics facility in Ekala – Ja-Ela.

Tourism Minister overwhelmed by rebound in arrivals despite Omicron fears
Russia, India, Ukraine, UK, Germany, France, Maldives, Australia, Poland, US among top source markets
Says Global Communication Campaign will be rolled out before end of Q1

Says CBSL and Treasury officials not sleeping, but aware of debt challenge and busy on ways to boost reserves to repay debt
Says debt restructuring has been an on-going exercise, cites swaps as one example
Rescheduling of some bilateral and multilateral debt on the cards
Criticises some business leaders and “internet economists” for calling for non-payment
Chides rating agencies for downgrade and insists they will be disappointed by their action
Wants those calling for default and rating agencies held accountable
Warns default would be disastrous and will lead to anarchy
Urges all to be patient as debt repayment task though challenging is being addressed pragmatically
Says global investors have faith in SL’s debt repayment and calls for default erode this confidence
Points to record $ 21 b in imports in 2021 as proof of how essential imports were facilitated whilst servicing debt