Category: Economy and Markets
Energy pricing helps but better monetary policy and fiscal framework needed in Sri Lanka
Sri Lanka’s is now experiencing stronger growth, and declining unemployment. Though oil prices are now falling, expansionary fiscal policy and accommodative monetary policy continue to destabilize the economy by pushing inflation up and putting pressure on the country’s balance of payments. The International Monetary Fund this month presented its report on this year’s Article iv […]
Sri Lankans brace for high growth and high inflation
November 14, 2006 (LBO) – Sri Lanka may have to settle for high inflation in the coming months as the government is keen to keep up the high economic growth momentum, treasury secretary P B Jayasundara said Tuesday. Though the budget will announce measures to contain demand pressure, it may not go as far as […]
‘s Central Bank continues to fight inflation with negative interest rates
November 14, 2006 (LBO) – Sri Lanka’s central bank on Tuesday froze interest rates, maintaining a wait-and-see policy over the economy, amidst soaring inflation, an expansion in money supply and real interest rates being negative. The bank said its benchmark reverse repurchase rate, used to manage liquidity and contain inflation, will remain at 11.125 percent. […]
Seylan Bank opts for private placement to beef up capital
November 14, 2006 (LBO) – Sri Lanka’s Seylan Bank Ltd plans to raise a billion rupees by privately placing two tranches of 500 million rupees worth of debentures, the bank said Tuesday. The funds are required to meet capital adequacy requirements stipulated by the Sri Lanka’s Central Bank, Seylan’s Assistant Company Secretary, N N Najumudeen […]
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November 13, 2006 (LBO) – HDFC Bank, Sri Lanka’s largest housing bank, retained its ‘AA-(lka)’ rating for their home loan securitization trust series, Fitch Ratings Lanka said Monday. The rating is for the timely interest payment and the ultimate payment of principal. The pass-through certificates or PTCs are backed by a pool of residential mortgage […]
Sri Lanka faces tough call on interest rates in face of rising inflation
November 13, 2006 (LBO) – Sri Lanka faces a tough call on interest rates on Tuesday as it balances the need to keep inflation in check and ensure economic growth remains on track, analysts said. Sri Lanka’s economy is growing by near eight percent, the stock market is at record highs, corporate profits are strong […]
Fitch rates six Sri Lankan Regional Development Banks
Nov 13, 2006 (LBO) – Six Regional Development Banks or RDBs secured investment grade ratings from Fitch Ratings Lanka, who said the risk evaluation took into account the banks’ higher risk profiles. The lack of automation has been one of the key constraints in this area. The six: • Rajarata Development Bank – ‘BBB+(lka)’; • […]
’07 budget may lift taxes, foreign borrowing
November 10, 2006 (Dow Jones)–The Sri Lankan government is likely to lift taxes and increase foreign borrowing in its 2007 budget in a bid to meet bloated defense costs and fund large development projects, say analysts. They expect the budget deficit next year at 7.5%-8.0% of gross domestic product, down from an expected 9% this […]
Sri Lankan markets jittery as bullets fly ahead of next week’s budget
November 10, 2006 (LBO) – Sri Lankan share prices are breaking records amidst flying bullets, but financial markets are uneasy that the government may use next Thursday’s budget to tax capital gains, analysts said. One of Asia’s best performing indexes, the island’s tiny stockmarket is up over 30 percent since January, largely on deal making […]
’07 Budget gap at 5% of GDP
November 8, 2006 (Dow Jones)–The Sri Lankan government expects the budget deficit to narrow to 5 percent of gross domestic product in 2007 from an estimated 9 percent this year due to higher tax collections and increased borrowings, the deputy finance minister said. “A key focus will be the small and medium scale industries.We plan […]
Main opposition in Sri Lanka blows hot and cold over upcoming budget
November 05, 2006 (LBO) – Sri Lanka’s opposition United National Party which has pledged to support the ruling party in the budget vote says, it will criticize harmful features of the budget, because economic policy is not included in a recent co-operation deal signed between the two parties. “We were not consulted on the upcoming […]
Sri Lanka rupee gains on dollar inflows; cash markets awash
November 03, 2006 (LBO) – The rupee gained against the dollar to hit an intra-day high of 106.40 Friday, to settle around 106.70 levels, while cash markets also turned liquid on offical capital flows, dealers said. The rupee closed at 107.20 against the dollar Thursday while cash markets turned liquid from rupees generated through an […]