Connect with us


Sri Lanka to conduct survey on unregistered migrants; offers houses

Share with your friends:

ECONOMYNEXT – Sri Lanka shares closed down on Friday as investors pull back on their buying interests as they await reviews from the International Monetary Fund, budget analysis and the Fitch downgrading the financial rating, an analyst said.

The main All Share Price Index was down 0.58 percent or 66.96 points to 11,465.73, while S&P SL20 was up 0.61 percent or 19.91 points to 3,244.51.

“Investors have adopted a wait and see approach on the IMF review and the upcoming budget,” an analyst said.

Fitch Ratings said it has downgraded the rating on several bonds involved in a domestic debt restructuring to default, while the long-term local currency rating was downgraded to ‘Restricted Default’.

“The ratings on its local-currency bonds tendered in the domestic debt exchange have been downgraded to ‘D’ from ‘C’ while its other four local-currency bonds not tendered in the domestic debt exchange have been affirmed at ‘C’,” the rating agency said.

Fitch downgraded Sri Lanka’s foreign currency rating to restricted default when the country defaulted on its sovereign and bilateral creditors last year.

A team from the International Monetary Fund will be in Sri Lanka from September 14 to 27 to conduct the first review of an Extended Fund Facility arrangement, a spokesperson said.

Sri Lanka will have to wait till the International Monetary Fund (IMF) has completed its first review of the ongoing IMF programme for the government to review its own fiscal policy, an official said, noting however that it will not step out of the programme’s framework regardless.

“Let’s wait and see until the review is over. State revenue is not where it was expected to be. There are several reasons for that. Until the end of the review, we cannot make a clear statement on how we can bring state revenue to adequate levels,” said Semasinghe.

The state minister said the IMF review, which began on September 14, will continue for two week.

“Let’s see what we’re told after that.

“Regardless, the government is not prepared to work outside the framework of the IMF programme,” he added.

The review will be conducted on June data.

Sri Lankan government representatives met with a team from the International Monetary Fund who are in the island to review the progress of the conditions for its Extended Fund Facility (EFF).

Officials have said Sri Lanka has over-achieved key IMF quantitative performance criteria though tax revenues, which is an indicative target has fallen short.

Sri Lanka also has met several structural benchmarks, some of which are under World Bank and Asian Development Bank prior actions.

Losers during trade were Ceylinco Insurance, Sampath Bank and Hatton National Bank.

The market generated a turnover of 784 million rupees and the yearly average stands at 2 billion rupees. This is the lowest revenue the market has generated since June 19.

“The turnover is a drop of 43 percent,” an analyst said.

Majority of the revenue came in from the capital good counters as investor sentiment is renewed with factors signaling economic stabilization with paved distances of disinflation and rising consumer demand.

“Interest was seen in the construction sector as the economy stabilizes,” an analyst said.

Sri Lanka’s 12-month consumer price inflation dropped to 4.0 percent with prices falling 0.1 percent within the month, data from the state statistics office showed.

Sri Lanka’s central bank has conducted deflationary open market operations to build reserves and also allowed the exchange rate to appreciate from March 2023.

The CCPI grew only 0.42 percent from September 2022 when the central bank registered a balance of payments surplus.

The banking sector is possessing a wait and see approach as a team from the International Monetary Fund will be in Sri Lanka from September 14 to 27 to conduct the first review of an Extended Fund Facility arrangement, a spokesperson said.

Investors pace around the uncertainties in the financial sector due to debt restructuring and the upcoming IMF review causing a semi evenly split turnover, but sees gains in the consumer sector as demand and overall economic stabilization builds, an analyst said.

The market saw a net foreign inflow of 32 million rupees, while the yearly net foreign inflow was 1.1 billion rupees.

Sri Lanka’s economy has stabilized faster than some other countries that went into crisis recently, State Minister for Finance Shehan Semasinghe said.

“Our economy is on a progressive trajectory,” Semasinghe told parliament last week in a debate to pass a tax linked to domestic debt restructuring.

“Compared to other countries’ whose economies collapsed we have been able to in the shortest time stabilize the economy.

“Other countries are commending our progress.” (Colombo/Sep11/2023)

Continue Reading

Source link

Share with your friends:
Continue Reading
Click to comment

Leave a Reply

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

This site uses Akismet to reduce spam. Learn how your comment data is processed.