US to redouble efforts to support crisis-hit Sri Lanka: Ambassador | EconomyNext

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Wednesday March 27th, 2024

Business

US to redouble efforts to support crisis-hit Sri Lanka: Ambassador

Tuesday August 30, 2022 9:36 am

ECONOMYNEXT – The United States will redouble its efforts to support Sri Lanka through bilateral trade, business collaboration, SME financing and other avenues, US Ambassador to Sri Lanka Julie Chung said.

Chung tweeted Monday August 29 evening after a meeting of the US-Sri Lanka Business Council on ways businesses of the two countries can collaborate to ensure the cash-strapped country gets back on a path to prosperity. Sri Lanka is currently going through its worst economic crisis since Independence, with high inflation and shortages having hit the public hard.

US-Sri Lanka bilateral trade already supports more than 180,000 workers supplying exports to the US and contribute billions to the island nation’s economy, said Chung.

“The US will redouble efforts to support SL along this path through ongoing efforts like financing for SMEs, fertilizer & seeds for farmers, education exchange & training to strengthen public financial management, as well as support through IMF if agreement can be reached (sp),” she said.

The US was recently central to a diplomatic standoff between India, China and Sri Lanka over a Chinese tracking vessel that the Indian media had dubbed a ‘spy ship’ which made a port call at the Chinese-built Hambantoa Port in the island’s deep south.

Chinese tracking vessel Yuan Wang 5 docks at Sri Lanka’s Hambantota Port

(Colombo/Aug30/2022)

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Banking

Sri Lanka banks to set up business revival units for troubled borrowers: central bank

Tuesday March 26, 2024 5:42 pm

ECONOMYNEXT – Sri Lanka’s banks will be directed to formally set up business revival units that will help re-structure companies whose loans have gone bad, the central bank said.

Business revival units were required to be set up initially during the covid pandemic, but now they will be made a permanent service of banks.

“We hope to issue a directive next month, for banks to set up BRUs which will help guide and strengthen small and medium enterprises,” Governor Weerasinghe told reporters Tuesday.

“The circular will expand the scope of the BRU.” The central bank received technical advice on this from the World Bank, and in keeping with practices in other countries.

Senior Deputy Governor Yvette Fernando said revival units will identify businesses that can be revived.

“There will be some criteria,” companies that fit the criteria will be guided to restructure after “a policy is approved on what type of institutions will be subject to it.”

The business revival unit will be a separate and independent unit from the lending side.

“It will be headed at the DGM level and will work independently of those giving the loan.

Some borrowers in trouble had loans from multiple banks, she said.

“This will require some sort of coordination and a database to be created. Then we can assess their repayment ability and cash flows.” The ADB is helping with the establishment of a guarantee institute. (Colombo/Mar26/2024)

Bonds & Forex

Sri Lanka rupee closes at 301.90/302.00 to the US dollar

Tuesday March 26, 2024 5:12 pm

ECONOMYNEXT – Sri Lanka’s rupee closed at 301.90/302.00 to the US dollar in the spot forex market on Tuesday, stronger from 302.60/70 on Monday, dealers said, while bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/40 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent up from 11.90/95 percent.

A bond maturing on 15.12.2028 closed stable at 12.10/15 percent. (Colombo/Mar26/2024)

Stocks & Companies

Sri Lanka stocks close up after interest rate cut

Tuesday March 26, 2024 4:59 pm

ECONOMYNEXT – The Colombo Stock Exchange closed up on Tuesday, data on its site showed.

The broader All Share Index closed up 0.90 percent, or 100.73 points, at 11,335; while the S&P SL20 Index closed down 1.32 percent, or 42.38 points, at 3,262.

Turnover was at 2.4 billion.

Trades in the banks sector (1.2bn) contributed the most to the day’s turnover.

Sampath Bank Plc (up at 78.80) saw 704mn worth of shares change hands.

DFCC Bank Plc which also saw active volumes (280mn), closed up at 71.10.

Major contributors to the Index included Hatton National Bank Plc (up at 174.25), LOLC Holdings Plc (up at 401.50), Browns Investments Plc (up at 5.50), and Commercial Bank of Ceylon Plc (up at 95.60.

Sri Lanka’s central bank cut its policy corridor by 50 basis points to 8.50 percent (floor) and 9.50 percent (ceiling) on Tuesday citing stable external conditions and low inflation. (Colombo/Mar26/2024)