Analysis

Sri Lanka’s Sovereign Foreign Debt: To Restructure or Not?

Sovereign debt restructuring can be pre-emptive or post-default. A default is inherently costly as it can result in a sustained loss of access to capital markets. That leaves pre-emptive restructuring when a country deems itself unable to service outstanding debt. The complex creditor landscape of today though makes governments reluctant to entertain sovereign debt restructuring….

(0)Comments | January 13, 2022 11:15 am

Sri Lanka debt pain will go from China to Wall St

MUMBAI, Jan 11 (Reuters Breakingviews) – Sri Lanka is the poster child for China’s so-called “debt trap diplomacy”, so asking Beijing for easier repayment terms looks logical amid a worsening financial crisis. Other options for President Gotabaya Rajapaksa may be to seek disjointed funding support from India and others or another bailout from the International Monetary Fund…

(0)Comments | January 11, 2022 1:06 pm

Company Meetings: Stop The Fraud

By Yukthi K. Gunasekera Over 2.3 billion Rupees is lost every year in Sri Lanka’s private sector due to unproductive meetings. This is a conservative estimate* – my guess is that the correct figure is probably ten times this number. Take for example what happened at a top apparel manufacturer in Sri Lanka. Every Saturday,…

(0)Comments | January 11, 2022 12:38 pm

Top Emerging-Market Bond Fund Bets on Sri Lanka Default Gain

Bloomberg – A top emerging-market money manager who scooped up gains with Ecuador’s restructured bonds is now waiting for Sri Lanka to default to load up on the nation’s debt. Carlos de Sousa, who oversees a $3.8 billion developing-nation bond fund at Vontobel Asset management in Zurich, expects the South Asian country to run out of money…

(0)Comments | January 10, 2022 5:57 pm

Diversification vital for the long-term stability of the RPCs

Should optimise assets, not limit themselves to being solely agriculture businesses By Bhathiya Bulumulla Over the past three decades, the Regional Plantation Companies (RPCs) have established themselves as a critical stakeholder of Sri Lanka’s plantation industry. The RPCs were formed in 1992, primarily with the intention of bringing in the private sector, to improve the…

(0)Comments | January 10, 2022 12:18 pm

Repay Foreign Debt or Finance Essential Imports

The available foreign reserves of the country can be used to either repay foreign creditors or to finance imports of essential goods and services required by its citizens. This is the dilemma facing Sri Lanka today. Repaying the full value of the bond using the limited foreign reserves available would provide a windfall gain to…

(0)Comments | January 10, 2022 11:10 am

The National Single Window: Paving The Way For Paperless Trade

By Mithara Fonseka and Kavishka Indraratna In 2016, Sri Lanka ratified its Trade Facilitation Agreement (TFA) with the WTO and in 2017 a Secretariat was established for the National Trade Facilitation Committee to drive much needed trade reforms in the country. Currently, the rate of Sri Lanka’s implementation commitments under TFA stands at 34.9% with…

(0)Comments | January 7, 2022 5:47 pm

15% food price increase in a single month

Advocata’s  Bath Curry Indicator (BCI) , which tracks the monthly changes in the retail price of food, recorded an increase of 15% from November 2021 to December 2021. Much of this increase is driven by rising prices of vegetables. 100g of Green Chillies at Rs18 increased to Rs 71. This is a 287% increase in…

(0)Comments | January 7, 2022 10:39 am

Worker Remittance Inflows Lose Steam: Why they are Important, and how do we Revive them?

By: Charith Gamage In a period of decreasing reserves and foreign exchange shortages, migrant worker remittances had once been a welcome stream of income for Sri Lanka in fulfilling its foreign exchange shortfalls. With the recent sharp fall in remittances, the ongoing situation is causing chaos in the island nation’s mission to increase foreign exchange…

(0)Comments | January 5, 2022 2:49 pm

Government Heavy-Handedness is to Blame for Our Currency Woes

By Vinuja Singharachchige Much is being said nowadays about the pressures the Sri Lankan Rupee is facing, but it is important that we understand the mechanics and greater economic context. Currency crises have been common in our modern history with countries facing sudden devaluations to the point where we can predict the patterns. There was…

(0)Comments | January 4, 2022 4:12 pm