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Margin Deposit Requirement against Letters of Credit (LCs) opened with Commercial Banks for the Importation of Vehicles

The Monetary Board of the Central Bank of Sri Lanka imposed a 100 per cent margin deposit requirement against Letters of Credit opened with the commercial banks for the import of motor vehicles,which are generally used for non-commercial purposes,with immediateeffect.Accordingly, Letters of Credit for the importation of these vehicle categories could be done only with a minimum cash margin of 100 per cent.

The decision to impose the margin deposit requirement is based on recent developments which, if not addressed, could threaten macroeconomic stability. These include the following:

The Central Bank of Sri Lanka meets the People of Rajarata and Wayamba

An Open Day programme aimed at providing easy access to Central Bank services for school children and people of the Rajarata and Wayamba regions, and creating awareness about Central Bank activities is to be held on 21st and 22nd September 2018 at the Central Bank of Sri Lanka Anuradhapura Regional Office premises and the Public Grounds (Salgado) Anuradhapura.

The programme will be held from 9.00am to 7.00pm and the public will get the opportunity of resolving EPF related issues and obtaining information about small and medium enterprise credit schemes and related services. A currency exchange facility to exchange damaged notes and obtain coins will also take place.

Clarification on the Erroneous Report regarding Sri Lanka issued by Nomura Holdings Inc.

Several international media sites have recently quoted an analysis by Nomura Holdings Inc., which shows that seven emerging economies including Sri Lanka are at risk of an exchange rate crisis.

The said media sites further quoted the report as saying Sri Lanka’s short term external debt is as high as US dollars 160 billion. As Sri Lanka’s short term external debt is nowhere near this figure, the Central Bank of Sri Lanka requested Nomura to correct the errors in their computations.1

In response, according to Bloomberg, Nomura has “corrected their ‘Damocles’ report to fix Sri Lanka’s short term debt figure to be US dollars 7.5 billion” in an emailed statement to media. Nomura has, however, kept the ‘Damocles score’ for Sri Lanka unchanged.

Sri Lanka Purchasing Managers’ Index - August 2018

The Manufacturing Sector PMI Increased to 58.2 index points in August 2018 from 57.2 index points observed in the previous month. The expansion observed in manufacturing activities in August was mainly driven by expansion in production led by the increase in new orders, especially in manufacturing of textiles, wearing apparel, leather and other related products. Further, employment also increased at a higher rate with the recruitment of employees especially for food and beverages sector led by the positive outlook for improving activities within this sector. However, stock of purchases show some slowdown, especially in manufacturing of other non-metallic mineral products. Nevertheless, stock of purchases in the manufacturing of textiles, wearing apparel, leather and other related products increased. Meanwhile, lengthening of suppliers’ delivery time usually indicates that economy is booming with expanding activities in the short run.

Release of 'Economic and Social Statistics of Sri Lanka - 2018' Publication

The 'Economic and Social Statistics of Sri Lanka - 2018' an annual publication of the Central Bank of Sri Lanka, is now available for public access.

This publication contains economic and social indicators of Sri Lanka in the areas of national accounts, agriculture, industry, external trade and finance, government finance, banking and financial institutions, money and capital markets, prices and wages, population and labour force, transportation, education, health, telecommunication services, climate and selected information on economic and social indicators of other countries. 

Commencement of Compensation Payment to CIFL Depositors

The Monetary Board cancelled the licence issued to Central Investment and Finance PLC (CIFL) with effect from 05.03.2018 in accordance with Section 37(3) of the Finance Business Act.

The Central Bank of Sri Lanka is pleased to announce the commencement of compensation payments for insured depositors of CIFL with effect from 27 August 2018 in terms of Sri Lanka Deposit Insurance Scheme Regulation No.01 of 2010 (as amended) (SLDILSS Regulations).

The payment process will be continued until all eligible depositors of CIFL who have claimed their dues are paid. Therefore, eligible depositors are kindly requested to wait patiently until CBSL officially inform the collection of their payment.

Further, with the Monetary Board decision to cancel the licence of The Standard Credit Finance Ltd effective from 25.07.2018, the compensation payment for the eligible depositors will also be paid in terms of the SLDILSS Regulations in due course.

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