Sri Lanka extends trade controls, license regime in import substitution drive

Sri Lanka has extended import bans for three months on a wide variety of goods and started a license regime on other goods in an import substitution drive after money printing brought currency pressure on top a Coronavirus crisis. Sri Lanka is relying on a law widely in the 1970s to control imports and cripple economic activities in th 1970s as the central bank was unable to deal with the collapse of the Bretton Woods system which also sent oil prices up. But the controls are now coming despite oil…

‘Adequate resources to meet contingencies’

The government will take every possible measure to bring back the economy to where it was before the Easter attack. The country was at a turning point when it faced the terrorist attack and it is a big blow to the economy in particular to the tourism industry, Minister of Finance Mangala Samaraweera told the media on Friday in Colombo. “We assure that the country is in a position to meet all its debt obligations. We have no intention of seeking further funding from the IMF,” he said. “We are…

Beijing defends Huawei amid row over role in UK’s 5G network

The UK should make “independent” decisions about whether to let Huawei help build its 5G network, according to China’s ambassador in London. The US, Australia and New Zealand say the Chinese firm is a security risk because of its ties to the state. But writing in the Sunday Telegraph, Liu Xiaoming said Britain should resist pressure from other nations. He said risks should be taken seriously but added the company had enjoyed a “good track record on security”. Last week, the Daily Telegraph reported the UK had agreed to allow Huawei…

Rupee falls for third session but CSE gains

The rupee closed 0.2% weaker on Friday as worries about more bomb attacks after the Easter Sunday attacks weighed, while stocks edged up for the third straight session after hitting a more than six-year low early in the week.    Sri Lankan Police are trying to track down 140 people believed linked to Islamic State, which claimed responsibility for the Easter Sunday suicide bombings of churches and hotels that killed 253 people, President Maithripala Sirisena said on Friday.  The currency ended at 175.30/80 to a dollar, 0.2% weaker than Thursday’s…

Colombo Stock Exchange sees Rs1.5bn net foreign inflow following 4% drop after terror attacks

The stock market in Sri Lanka has remained steady following an initial 4% drop in the broader indices after the Easter Sunday terror attacks. In a surprising development, during the first week of trading since the market opened after the bombings, stocks saw a net foreign inflow of over Rs1.5bn (US$9mn). Analysts were surprised at how strong the market has held up considering the magnitude of the ISIS inspired global terror attack in Sri Lanka. During the week there was significant net foreign buying in stock market bellwether John Keells…