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Monday June 3rd, 2024

Sri Lanka bank deposits protected in any domestic debt optimization: CB Governor

ECONOMYNEXT – Sri Lanka’s public bank deposits and stability of the banking system will be safeguarded in any reorganization of domestic debt, Central Bank Governor Nandalal Weerasinghe said.

“There is speculation about the stability of public deposits and banking system stability,” Governor Weerasinghe told a public forum.

“In any kind of debt optimization, we will ensure and safeguard banking system stability as well as the protection of public deposits.”

A key objective of the central bank is maintaining financial sector stability, he said.

Sri Lanka has to at least extend the maturity of some domestic debt to meet International Monetary Fund annual financing ceiling in 2027-2032, which have to be brought down to about 13 percent from gross domestic product from the current 30 percent.

Sri Lanka banks have said they have received assurances on the effect of any debt re-structuring.

According to a Q and A released after a presentation to creditors all domestic bonds may be re-structured.

“The envisaged domestic debt optimization operation will involve (i) T-Bills held by the CBSL and (ii) T-Bonds (in the context of a voluntary exchange operation),” according to the statement.

“Only T-Bills held by the CBSL (equivalent to 62.4% of total outstanding T-Bills) will be considered for treatment to create some fiscal space – all other T-Bills are excluded from the envisaged operation.

“All T-Bonds may be considered for participation in a voluntary domestic debt optimization operation, provided that it can be designed to minimize impact on banks and preserve financial stability.

“The impact on the domestic financial sector is therefore being carefully assessed by the authorities.

“In particular, the process of voluntary debt optimization operation with respect to T-Bonds will be developed through consultations held by the Sri Lankan government and its advisors with major T-Bonds holders, aimed at gauging different options and understanding the constraints of each holder.”
(Colombo/May10/2023 – Updated (II)

Comments (3)

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  1. Rienzie Wannithantri says:

    With due respect to CB Governor, his clarification of domestic debts, “Is he not interested in irregularities ” Corruption prevailing at Peoples Bank ??
    Marginalizing Pensioners Living Abroad for highlighting same. Withholding (12) months Govt. Penson (June 22-May 23)

  2. Rienzie Wannithantri says:

    Sir, Bank stability you accrue is it to deprive Pensioners funds to be withheld as People’s Bank is depriving from pensioners.
    A Pensioner Living Abroad is deprived 12 months funds Rs.138.070.04 (6/22-5/23)

  3. Upali De Soyza says:

    Will there be a limit on T Bills (held by the CBSL) one will be allowed to hold and not subject to restructuring (haircut or extend the period),

    ex- say allowing to hold TB of LKR 50 million before any haircut or extend (delay maturing ). If extended will the CBSL continue with paying the existing rate % of the TBs already in place?

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Comments (3)

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Your email address will not be published. Required fields are marked *

  1. Rienzie Wannithantri says:

    With due respect to CB Governor, his clarification of domestic debts, “Is he not interested in irregularities ” Corruption prevailing at Peoples Bank ??
    Marginalizing Pensioners Living Abroad for highlighting same. Withholding (12) months Govt. Penson (June 22-May 23)

  2. Rienzie Wannithantri says:

    Sir, Bank stability you accrue is it to deprive Pensioners funds to be withheld as People’s Bank is depriving from pensioners.
    A Pensioner Living Abroad is deprived 12 months funds Rs.138.070.04 (6/22-5/23)

  3. Upali De Soyza says:

    Will there be a limit on T Bills (held by the CBSL) one will be allowed to hold and not subject to restructuring (haircut or extend the period),

    ex- say allowing to hold TB of LKR 50 million before any haircut or extend (delay maturing ). If extended will the CBSL continue with paying the existing rate % of the TBs already in place?

Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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