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Monetary Policy Review for October 2010 To Be Released On Tuesday, 19 October 2010 at 7.30 a.m.

In CENTRAL BANK OF SRI LANKA, magerata on October 15, 2010 at 1:48 pm

The Director of communications of Central Bank of Sri Lanka has informed that the Monetary Policy Review for October 2010 will be released on Tuesday, 19 October 2010 at 7.30 a.m. and not on 21 October 2010 as previously announced. Once released, we will post the information here on Magerata.

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Upcoming Sri Lankan Treasury Bills Auction On 13th October.

In CENTRAL BANK OF SRI LANKA on October 10, 2010 at 11:50 pm

Central Bank of Sri Lanka announced upcoming six month and one year Treasury Bills of Rs. 2,500 million of 182 days, and Rs. 6,500 million of 364 days, respectively, are being offered on auction basis on 13 October 2010 with the settlement date on 15 October 2010.

Sri Lanka’s Gross Reserves Surpass US $7 billion Mark.

In CENTRAL BANK OF SRI LANKA, Economy, Postwar Sri Lanka on October 7, 2010 at 10:08 pm

Central Bank of Sri Lanka announced today that the Sri Lanka’s Gross  Reserves have surpassed US $7 Billion mark on 4th October 2010. These reserves are roughly equivalent of 6.8 months import requirements of Sri Lanka. The officials also mentioned that this is the highest ever reserves level recorded by Sri Lanka.

Are we beginning to see the results of ending of the war?

Sri Lanka External Sector Performance – July 2010 (+ Jan – July 2010)

In CENTRAL BANK OF SRI LANKA, Economy, magerata on October 7, 2010 at 7:49 am

External Sector Performance – July 2010

PDF of the original document “Sri Lanka External Trade Performance January – July 2010


Earnings from exports rose to US dollars 656 million reflecting a growth of 0.6 per cent in July 2010. Earnings from agricultural exports performed well, while earnings from industrial exports declined marginally. Expenditure on imports increased by 25.3 per cent to US dollars 1,177 million in July 2010 reflecting increases in all major categories of imports.  The cumulative earnings from exports and expenditure on imports have increased by 11.4 per cent and 39.2 per cent, respectively, during the first seven months of 2010. The trade deficit expanded to US dollars 3,364 million during this period.

Sources: Central Bank of Sri Lanka              Sri Lanka Customs
The increase in earnings from agricultural exports is attributed mainly to the healthy performances by the tea and minor agricultural export sectors. Year-on-year, tea exports volumes grew by 6.1 per cent to 28.8 million kilograms in July 2010 while the average export price of tea increased by 1.4 per cent to US dollars 4.19 per kg.  Earnings from minor agricultural exports grew by 17.7 per cent mainly due to significant increases in the export volumes of sesame seeds, pepper, vegetables and cloves and the higher prices fetched by essential oils, cardamoms and cinnamon. Lower rubber production due to unfavorable weather conditions amidst higher international demand for natural rubber led export prices of rubber to increase by 84.4 per cent to US dollars 3.28 per kg. Although rubber export volumes declined by 46.0 per cent in July 2010, exports of rubber based products have increased substantially, reflecting higher levels of domestic value addition. Other key categories of industrial exports, such as machinery and equipment and petroleum based products also performed well in July 2010. Nevertheless, earnings from industrial exports declined marginally to US dollars 483 million in July 2010, led by lower exports of textiles and garments, ceramic products and diamonds and jewellery.
Expenditure on imports of consumer goods increased significantly during the month of July 2010, led by higher imports of non-food consumer goods, of which nearly 45 per cent comprised of motor vehicles.  Food imports also increased mainly due to the higher prices of sugar imports. However, expenditure on rice imports declined in view of the lower prices in the international markets and the bountiful crop from the yala season.  Expenditure on intermediate goods also increased, led by higher imports of fertilizer, mainly due to the substantially higher import volumes of fertilizer amidst lower prices. Expenditure on investment goods increased owing to the significant increases in expenditure on transport equipment, of which around 55 per cent comprised of an aircraft imported in July 2010.
During the first seven months of 2010, workers’ remittances increased by 12.5 per cent over that of the corresponding period of 2009 to US dollars 2,141million. The gross official reserves, without Asian Clearing Union (ACU) funds increased to US dollars 5,467 million by end July 2010. Based on the previous 12 months average expenditure on imports of US dollars 1,021 million per month, the gross official reserves, without ACU funds were the equivalent of 5.4 months of imports.

The performance of external trade during the period is further illustrated in the following table.

External Trade Performance: July 2010 and January – July 2010

Sri Lanka Meets IMF-SBA Key September 2010 Goals

In CENTRAL BANK OF SRI LANKA, development, Economy, magerata on October 7, 2010 at 6:30 am

Sri Lanka achieves end September targets under IMF-SBA programme

Sri Lanka has successfully achieved the key September 2010 programme targets, namely, Net International Reserves (NIR), Reserve Money (RM) and Net Domestic Financing (NDF) under the IMF-SBA. This outcome indicates the successful progress Sri Lanka has made since the approval of the SBA facility in July 2009. So far, under the programme, Sri Lanka has received 5 tranches, totalling US dollars 1,275 million, out of the total facility of approximately US dollars 2,600 million.

An IMF staff mission is expected in November 2010 to conduct the next review under the SBA programme, and the sixth tranche is expected to be released on completion of same.

PDF version of the press release “Sri Lanka achieves end September targets under IMF-SBA programme” Sri Lanka Meets IMF-SBA September Goals

 

Colombo Consumers Price Index 2007- 2010 September.

In CENTRAL BANK OF SRI LANKA, Colombo Consumers’ Price Index, Economy, magerata on October 1, 2010 at 10:27 pm

The Central Bank Of Sri Lanka has released monthly data on the Colombo Consumers Price Index September 2010 in a tabular format. The little problem is that it was prepared for publication by someone who did not know how to create a table in the famous Microsoft Word they use and also had no idea of font sizes. I have manipulated table columns to make it a bit readable.

Colombo Consumers Price Index 2007-2010

Please download the attached PDF file,  Colombo Consumers’ Price Index (CCPI) 2008-2010

Inflation Rises In Sri Lanka During September 2010, The Department of Census and Statistics

In CENTRAL BANK OF SRI LANKA, Colombo Consumers’ Price Index, Economy, magerata on October 1, 2010 at 10:02 pm

Inflation, as measured by the Colombo Consumers’ Price Index (CCPI) (2002=100), computed by the Department of Census and Statistics, increased to 5.8 per cent in September 2010, on a point-to-point basis as anticipated, from 5.0 per cent in August, reflecting mainly the lower base in the corresponding month of 2009. Meanwhile, the annual average inflation increased to 5.0 per cent in September from 4.5 per cent in the previous month, as a result of the price developments in the preceding twelve month period. Meanwhile, the core inflation, which measures the price movement of non-food and non-energy items of the CCPI basket, stabilized at 6.3 per cent on an annual average basis, for the fourth successive month, while increasing marginally on a point-to-point basis, to 5.7 per cent in September 2010 from 5.5 per cent in the previous month.

The contribution to the monthly increase of 1.0 per cent in the Index originated from price increases in the sub categories of Food and non-alcoholic beverages (1.7 per cent); Clothing and footwear (1.2 per cent); Health (0.4 per cent); Housing, water, electricity, gas and other fuels (0.3 per cent); Recreation and culture (0.2 per cent); and Furnishing, household equipment and routine household maintenance (0.03 per cent). Meanwhile, prices in the sub categories of Transport, Communication, Education, and Miscellaneous goods and services remained unchanged during the month.

The original Press release by CBSL as a PDF Sri Lanka inflation Sep 2010

Global Investors Snatch Up Sri Lankan Sovereign Bond Issue of USD 1 billion

In CENTRAL BANK OF SRI LANKA, Economy, magerata, Sri Lankan Market Research on September 30, 2010 at 9:26 am
The third international sovereign bond offering by Sri Lanka amounting to USD 1 billion to be realized in 10 years, attracted an order book that exceeded USD 6.3 billion within 14 hours of its opening, indicating the high global investor confidence based on the recent progress and the future prospects in Sri Lankan economy, after the eradication of civil war that raveged the country for more than 30 years.
Following is the full text of the CBSL press release and a PDF version of the document is available after the jump
Global Investors’ Demand Exceeds  over USD 6 billion in 14 Hours For Sri Lankan Sovereign Bond Issue of USD 1 billion
Sri Lanka finalized a USD 1 billion  10 year Sovereign Bond issue  with  a coupon rate of 6.25% on 27 September 2010. This was the third international sovereign bond offering, following  issues in 2007 and   2009. The offering   attracted an order book that  exceeded USD 6.3 billion within  14 hours of opening  on 27 September 2010, thereby being over-subscribed by more than 6 times, clearly underscoring the high global investor confidence based on the recent progress and the future prospects in Sri Lankan economy since the   end of  the  conflict in the country. Orders were  received from 362 investors globally.  By geographic distribution, 52.5% of the bonds were allocated to investors in the United States,  25% to investors in Europe and 22.5%   to investors in Asia.  By investor type, 85% of the bonds were allocated to Fund and Asset Managers and the balance to Pension Funds, Insurance companies and banks.
The Offering  is of 144A / Reg.S format and the bonds will mature in October 2020. The bonds are rated B+ by two international rating agencies, Standard & Poor’s  and  Fitch Ratings and will be listed on the Singapore Exchange. The current coupon rate of 6.25%  for the  10 year sovereign bond is significantly lower than the cost of borrowings as compared to previous two international offerings in 2009 and 2007.
Year

Amount

US $ million

Maturity (yrs)

Yield (%)

2007 500 5.0 8.25
2009 500 5.25 7.40
2010 1000 10.0 6.25

The Government will use the proceeds from the bond issue to finance  its current     infrastructure and to  restructure  a part of the existing debt stock of the government  to improve overall public debt management.

Bank of  America Merrill  Lynch, Royal Bank of Scotland and Hong Kong and Shanghai Banking Corporation functioned  as Joint Lead Managers and  Joint Book Runners of the offering,  while Bank of Ceylon participated as   Co-Manager.

Sri Lankan Sovereign Bond Issue of USD 1 billion

Sri Lanka Treasury Bill Auction Sep, 29, 2010

In CENTRAL BANK OF SRI LANKA, magerata on September 30, 2010 at 9:01 am
TREASURY BILL AUCTION

The weekly primary auction for the week ending 01-10-2010 for the re-issue of Rs.12,000 million maturing Treasury bills was held today. The auction was oversubscribed with bids amounting toRs. 29,787 million being received. It was decided to accept entire amount offered to the market.

Complete information, please refer to the PDF File; Sri Lanka TREASURY BILL AUCTION Sep 29 2010

Bringing Back The Finance Company PLC

In CENTRAL BANK OF SRI LANKA, Economy, magerata on September 30, 2010 at 8:38 am

I am sure everyone knew and a few wondered what is going to happen to The Finance Company PLC when a Ceylinco Group Companies went under. The Central Bank of Sri Lanka (CBSL) intervened and safeguarded the interests of  stakeholders, including the employees, customers, depositors and shareholders. It also helped to stabilize the financial situation of the country as well.

Now the CBSL thinks it is time to return the company to a Board of Directors representing the shareholders as the situation has normalized and the public confidence of the TFC is returning.

Following is the text of the news release and those who are interested could also download the PDF document.”Recapitalising The Finance Company PLC.PDF ”

Recapitalising The Finance Company PLC

In February 2009, the Central Bank of Sri Lanka (CBSL) intervened to stabilize The Finance Company PLC (TFC) in the face of difficulties encountered by the TFC as a result of the collapse of the several Ceylinco Group establishments. The interventions included the appointment of a Managing Agent and the issue of several specific directions to TFC. These measures contributed to stabilize TFC and to safeguard the interests of the company and its stakeholders, including the employees, customers, depositors and shareholders, and also to maintain financial system stability in the country. As a result of such interventions, the Company has now recovered from the initial shock, while public confidence has been restored.

In that background, the Monetary Board of the CBSL has decided that the time is now appropriate to recapitalize the company in order to facilitate the smooth operations of the Company in the future. It has also been decided that the Company must be managed by a capable Board of Directors representing the shareholders so that the Managing Agent could exit from the operations of TFC as soon as normalcy has been restored.