Despite the delay in the quarterly publishing of Sri Lanka's GDP figures for the first time by the Department of Census and Statistics (DCS), the Central Bank has forecasted the country’s gross domestic product to shrink by 1.7% in 2020.
The International Monetary Fund (IMF) forecasted Sri Lanka’s economy to contract by 4.6% while the World Bank predicted it to shrink by 6.7% recently.
In an unusual directive by the monetary regulator, Sri Lankan banks have been given more discretion in assessing its ability to repay loans which had already been re-structured amid a Coronavirus crisis and lenders should only use Central Bank economic projections to determine losses.
Under earlier guidelines issued for meeting the Sri Lanka Financial Reporting Standards 09, banks were allowed to use International Monetary Fund and World Bank projections for ‘Economic Factor Adjustment.
Private credit grew by LKR 87.4 billion in September 2020, expanding for the second month in a row and credit to the government surged, official data showed.
Credit to the government increased by LKR 199 billion, the highest since LKR 269.9 billion seen in March 2020. Credit to state enterprises fell by LKR 4.6 billion to LKR 1,018.3 billion.
The government has allocated LKR 7.3 billion to provide food for families’ in-home quarantine and poor families in curfew bound areas, the government information department said.
However, the local traders are jacking up prices and hiding stocks of essential commodities expecting a tax hike from the upcoming budget 2021.
The Consumer Affairs Authority has slapped price controls on several varieties of rice as prices spiked amid import controls and the second wave of COVID-19.
Sri Lanka has increased tax on Maldive fish and also raised a tax on imported fresh fish by 30% as the Coronavirus outbreak from the Peliyagoda fish-market reduced domestic demand.
A special commodity levy on Maldive fish was increased to LKR 302 per kilogram from LKR 102 per kilogram with effect from October 27 for six months, a gazette notification revealed.
Meanwhile, the Central Bank has extended the grace period of COVID-19 relief loans given at 4% to 9 months from the date of granting to the current 6-month period.
Sri Lanka stocks closed 0.57% higher on Monday, pushed by index heavy counters Expolanka Holdings, Singer Sri Lanka PLC and Richard Pieris and Company, Colombo Stock Exchange provisional data showed.
Sri Lanka rupee depreciated at LKR 184.60/70 to the USD in the spot market on Monday (10) while yields were marginally up in dull market trades, dealers said.
Sri Lanka’s forex reserves dropped by USD 807.8 million in October 2020 to USD 5,578.5 million as the government repaid sovereign bonds, official data showed.
In the secondary securities market, bond yields were marginally up in dull market trades, dealers said.