Sri Lanka better positioned to withstand oil price shocks : CB Governor

The Governor of the Central Bank of Sri Lanka, Dr. Nandalal Weerasinghe has assured the public that Sri Lanka is now in a “much better position” to withstand global economic shocks, including rising oil prices and geopolitical tensions in the Middle East.

Speaking in an interview with Bloomberg recently, the Governor highlighted that the nation has built significant financial buffers, including foreign reserves that have surged from near-zero levels to over $7 billion.

This provides a critical safety net against the rising oil prices and supply chain disruptions currently triggered by Middle East tensions.

The Governor emphasized that the domestic inflation environment has transformed, dropping from a crisis peak of 70% to a current rate of 1.6%.

This low inflation gives the Central Bank “significant space” to absorb external price shocks without destabilizing the local economy.

Unlike the previous crisis, where fuel shortages were caused by a total lack of foreign exchange, Dr. Weerasinghe clarified that any current risks are related to global supply logistics rather than a lack of domestic funding.

He noted that the exchange rate will be allowed to act as a shock absorber to manage demand and protect the country’s fiscal health.

Addressing the ongoing program with the International Monetary Fund (IMF), Dr. Weerasinghe confirmed that while the December review was delayed due to the impact of recent cyclones and climate change, negotiations are set to resume around March 15.

The government is aiming for IMF Executive Board approval by May 2026 to secure the next disbursement. He noted that the IMF program remains a “key pillar” of stability, and there is enough flexibility within the agreement to adjust targets based on the current global outlook and the domestic impact of natural disasters.

Despite the challenges, the Governor remains optimistic about national growth, projecting a GDP increase of nearly 5% for the year—outperforming initial IMF estimates of 2%.

His primary concern remains the duration of the conflict in the Middle East; should the disruption exceed four to five weeks, the impact on global trade routes and supply chains could become a broader burden.

For now, however, the Governor maintains that Sri Lanka has the monetary and fiscal buffers necessary to ensure that the economic recovery remains orderly and manageable.

PC Polls Under a New Electoral System, Says Minister

Minister of State Administration, Provincial Councils and Local Government, Chandana Abeyratne, says that Provincial Council elections will be held as soon as a consensus is reached on a new electoral framework.

The Minister made these remarks following a ceremony held in Kandy.

According to the minister, the provincial council elections were postponed during the previous administration about seven years ago and emphasized that the current government has not conducted Provinical Council elections as the current administration has identified the requirement of a new electoral system and stated that discussions are underway on this.

Accordingly, a committee has been appointed to decide on how to implement a new electoral system.

Minister Abeyratne emphasized that once the committee concludes its work and an agreement is reached, the government is committed to conducting the elections without further delay.

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Washington indicates ‘final decision’ on Iranian crew rests with Colombo

The United States has said it respects Sri Lanka’s sovereignty in deciding how to handle Iranian sailors rescued after the sinking of a warship off the island’s southern coast.

The statement from the US State Department follows reports that Washington had been privately leaning on Colombo to block the repatriation of the crew members, who were brought ashore after a week of high-seas drama that saw the first U.S. submarine torpedo attack since the Second World War.

Addressing the Raisina Dialogue in New Delhi on Saturday, Foreign Minister Vijitha Herath said that 32 sailors rescued from the sunken frigate IRIS Dena are being cared for under international treaty obligations.

When asked directly if the United States was pressuring the government to detain the men, Herath declined to answer directly, stating instead that Colombo had “taken all the steps according to international laws.”

The diplomatic standoff began on Wednesday when the IRIS Dena was struck by a US torpedo 19 nautical miles off the coast of Galle.

Sri Lankan naval teams recovered 84 bodies and rescued 32 survivors from the wreckage.

Just 24 hours later, a second Iranian warship, the IRIS Bushehr, was granted safe haven in the northeastern port of Trincomalee after reporting engine failure, resulting in the evacuation of 219 more crew members.

In a televised address earlier this week, President Anura Kumara Dissanayake clarified that the government would adhere to the Hague Convention.

Under these international laws, a neutral state is required to hold combatants from a warring state until hostilities have ceased.

While US officials had reportedly expressed concerns that Iran would use the returning sailors for propaganda purposes, the public stance from Washington has shifted toward recognition of Sri Lanka’s legal autonomy.

“The United States of course respects and recognizes Sri Lanka’s sovereignty in the handling of this situation,” a State Department spokesperson told AFP, adding that the final decision rests solely with Colombo.

The regional impact of the conflict has also touched India, where the IRIS Lavan, a third vessel from the same fleet, was permitted to dock in Kochi on Saturday.

Indian External Affairs Minister S Jaishankar defended the move on “humane grounds,” noting that many of those on board were young cadets caught on the “wrong side of events.”

The three Iranian vessels had originally been in the region for a multi-national fleet review hosted by India, which concluded shortly before full-scale hostilities broke out in the Middle East last week.

In Colombo, senior administration officials confirmed they are now in talks with the International Committee of the Red Cross (ICRC) to manage the survivors, while Iranian diplomats continue to press for the return of the remains of the 84 sailors killed in the initial strike.

Source:Lankaleader.lk

Explosion, injuries and drowning killed Iranian sailors, autopsies reveal

Post-mortem examinations conducted on the bodies of 84 Iranian sailors recovered from a sunken vessel have revealed that they died from fractures caused by an explosion, internal injuries and drowning, officials said on Friday (6).

The sailors had been aboard the Iranian warship IRIS Dena, which sank following a torpedo attack by a United States submarine.

Their bodies were brought to the Galle National Hospital by the Sri Lanka Navy, where a team of specialist judicial medical officers carried out the examinations.

The autopsies were conducted by Professor U.C.P. Perera, Ajitha Ranaweera, and Janaki Varushaheddeni together with 12 other forensic medical officers.

The examinations continued until 5 a.m. on Friday, with the forensic team divided into three groups in order to examine three bodies simultaneously.

Following the post-mortem examinations, the remains were placed in two designated cold storage facilities.

According to the findings, the sailors had died from blast-related fractures, internal trauma and drowning.

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Iranian sailors: No demands made by US, says MOD

The Ministry of Defence yesterday (7) rejected foreign media reports which claimed that the United States had pressured Sri Lanka not to return rescued Iranian sailors to Tehran following recent maritime incidents in the Indian Ocean.

“There is no truth to the claims that the US Government or the US Embassy have applied pressure on Sri Lanka to refrain from returning the sailors to Iran and no such dialogue has taken place,” Deputy Minister of Defence Major General (Retd) Aruna Jayasekara said, adding that there had been no conversation regarding the matter thus far.

He stated that no one had spoken on behalf of the US Government or the embassy regarding this matter, adding that it appeared that certain media outlets were spreading the news, but there had been no such information, dialogue, or conversation on the issue.

Jayasekara also confirmed that the rescued sailors were currently being accommodated at secure locations under Sri Lankan custody while administrative and diplomatic processes continued.

“The 32 Iranian sailors rescued from the first vessel have been relocated to a secure location in Galle at the Boossa cantonment, while the 204 sailors from the second vessel are being kept under Sri Lankan custody in Welisara,” Jayasekara said.

He noted that Sri Lanka had to carefully balance its international relationships while addressing the situation.

“Sri Lanka maintains long-standing relations with Iran, but we also need to maintain relations with the US and Israel, particularly because many Sri Lankan expatriate workers are employed in Israel,” he said.

The comments come after reports suggested that Washington had sought to prevent the return of the sailors amid concerns that Iran could use the incident for political messaging.

Sri Lanka, however, has maintained that its actions have been guided strictly by humanitarian obligations and international law.

Ministry of Foreign Affairs Spokesperson Thushara Rodrigo said that decisions relating to the sailors and related diplomatic matters would be handled in accordance with established international frameworks.

“Respective international law and diplomatic norms will guide the enforcement,” Rodrigo said.

He also cautioned against the political exploitation of those involved in the maritime incidents: “Using the victims for publicity or propaganda will only further complicate the situation. Our objective is to help de-escalate tensions, not inflame them.”

Rodrigo reiterated Sri Lanka’s broader diplomatic position amid the ongoing geopolitical tensions, noting: “Sri Lanka is a neutral country in the international political landscape and we believe in diplomatic engagement for a peaceful resolution.”

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US pressing Sri Lanka not to repatriate Iranian crew and survivors from sunken ship, memo says

WASHINGTON, March 6 (Reuters) – The United States is pressing Sri Lanka’s government not to repatriate the survivors from ​the Iranian warship it sank this week, as well as the crew of a second Iranian ship that is in Sri ‌Lankan custody, according to an internal State Department cable seen by Reuters on Friday.
A U.S. submarine sank the IRIS Dena warship in the Indian Ocean about 19 nautical miles off Sri Lanka’s southern port city of Galle on Wednesday, killing dozens of sailors and dramatically widening Washington’s pursuit of the Iranian navy.

On Thursday, Sri Lanka began offloading 208 crew members from ​a second Iranian ship, the naval auxiliary vessel IRIS Booshehr, which had found itself stranded in Sri Lanka’s exclusive economic zone but outside ​its maritime boundary.

President Anura Kumara Dissanayake said his island nation had a “humanitarian responsibility” to take in the crew.

The torpedoing ⁠of the Dena – which U.S. Defense Secretary Pete Hegseth described as “quiet death” – was the first such action by the United States since World War Two ​and a clear sign of the Iran conflict’s widening geographic scope.

The internal State Department cable, which was dated March 6 and has not been previously reported, ​said Jayne Howell, the charge d’affaires at the U.S. embassy in Colombo, had emphasized to Sri Lanka’s government that neither the Booshehr crew nor the 32 Dena survivors should be repatriated to Iran.

It said “Sri Lankan authorities should minimize Iranian attempts to use the detainees for propaganda.”

A State Department spokesperson speaking on the condition of anonymity appeared to suggest that Washington ​was not trying to dictate Sri Lanka’s decision on the issue.

“The United States of course respects and recognizes Sri Lanka’s sovereignty in the handling of ​this situation. The ultimate disposition of the IRIS Bushehr and its crew, as well as the Iranian sailors rescued at sea, is a decision for Sri Lanka to make ‌pursuant to ⁠its domestic law and international legal obligations,” the spokesperson said.

“We are pursuing dialogue with Sri Lanka and our utmost goal is to mitigate the threat that Iran poses to the United States and our partners,” the spokespersons added.

Representatives for Dissanayake’s office and Sri Lanka’s foreign ministry were not immediately available for comment.

The cable said Howell also told the Israeli ambassador to India and Sri Lanka there was no plan to repatriate the crew to Iran. The envoy asked Howell ​whether there was any engagement with the ​crew to encourage “defection”, the cable ⁠said.

A representative for the Israeli embassy in New Delhi did not respond to a request for comment.

On Wednesday, Sri Lanka’s deputy minister for health and mass media, Hansaka Wijemuni, told Reuters that Tehran had asked Colombo for help repatriating ​the bodies of those killed aboard the Dena, but a timeframe to do so has not yet been ​determined.

The Dena had taken ⁠part in naval exercises organised by India in the Bay of Bengal last month and was returning to Iran when it was struck by a U.S. torpedo.
A U.S. official, speaking on condition of anonymity, told Reuters the Dena was armed when it was hit and the United States did not provide a warning before ⁠carrying out the ​strike.

The State Department cable said the second vessel, the Booshehr, will remain in Sri Lankan ​custody for the duration of the conflict.

Sri Lankan authorities said on Friday that they were escorting the Booshehr to a harbor on the eastern coast and moving most of its crew to a ​navy camp near Colombo.

Reporting by Humeyra Pamuk; Additional reporting by Idrees Ali in Washington and Uditha Jayasinghe in Colombo; Editing by Don Durfee and Daniel Wallis

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Tamil parties discuss, agree on federal governance, self-determination

Tamil parties from the north and the east have decided not to act individually or on party basis in government-initiated dialogues on constitutional formulation and matters relating to the ethnic issue.

Meeting in Colombo on 02 March under the auspices of the Tamil Lawyers Forum (TLF), they reached common ground that a federal constitution should allow for Tamils’ sovereignty and self-determination in order to find a lasting solution for them.

The Tamil parties decided to formulate a draft inclusive of basic aspects of a federal system of governance in order to reach social consensus among the Tamil and Sinhala communities.

Participants at the discussion were TNPF’s Gajendrakumar Ponnambalam, secretary Selvraja Gajendran, ITAK secretary M.A. Sumanthiran, Sivagnanam Sridaran, Thurairasa Raviharan, TELO leader Selvam Addailakalanathan, secretary Govindan Karunakaran, media spokesman Suren Gurusamy and EPRL leader Suresh Premachandran.

The TLF coordinators of the event were K.S. Ratnavel, V. Puvidaran, Prof. S. Sarveshvaran, Suganthi Rajakulendra, V.S. Niranjan, G.K. Ranitha and M. Jude Dinesh.

The process initiated will be taken forward on several fronts, the TLF said.

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Sri Lanka, India review bilateral cooperation and regional developments

Minister of Foreign Affairs, Foreign Employment and Tourism Vijitha Herath has met with India’s External Affairs Minister Dr. S. Jaishankar.

Posting on X, Minister Herath said they had a warm and constructive meeting, during which they reviewed progress in Sri Lanka–India cooperation and exchanged views on regional developments.

He further stated that Sri Lanka values India’s continued partnership.

How King Rajasinghe’s flag was altered By L.B.Senaratne

Did the Ceylonese Government at the time of the Independence Act agree to have the Standard (a flag used as the symbol of a person, group, or organisation) of Sri Wickrama Rajasinghe on the flag when our national flag was finalised?

This was keeping with the proposal made by Sinna Lebbe, the MP of Batticaloa.

MP Lebbe rose in parliament and said: “This house is of the opinion that the Royal Standard of King Sri Wickrama Rajasinhe which depicts a yellow lion holding a sword in its right paw and placed in front of a red background, be adopted as the official flag of Sri Lanka.

The original flag was removed to England after the Convention of 1815.

But the personal flag of the King is very different from the flag brought by E.W. Perera from England and published by the Dinamina newspaper in 1915.

That was something new to the people of Ceylon and no one questioned it with due respect to E.W. Perera and D.R. Wijewardene, for their roles in bringing the flag of the Lion to Ceylon.

Three flags from ‘Ceylon’ were hanging on the Great Hall of Chelsea Hospital.

It was a common sight to view the flags of nations, claimed to have been captured by the British, to be hung over the pews of the Chelsea Hospital. It was a Chapel until World War II broke out and afterwards the flags were folded and left at the Tower of London until the cessation of hostilities. When they were removed after peace was achieved, the flags were in a damaged state and hence could not be flown. The British Army made drawings of what was left and they are today on the walls of the hall.

Out of the three flags, one was the standard of King Sri Wickrama Rajasinghe as depicted below.

The Chelsea Royal Hospital founded by King Charles II, was a military hospital. And three Kandyan flags taken away by Captain William Pollock were found there. These flags hung alongside other captured flags and colonial trophies from the colonies. The flags were dusty, threadbare and faded. They were placed with their identities.

During the birth of the Republic, Prime Minister Sirimavo Bandaranaike made a request in keeping with the request made MP Sinna Lebbe.

The late Dr. Roland Silva, former Director General of Archaeology, while taking the new design to Prime Minister Sirimavo Bandaranaike for approval, noticed that the lion in the logo had been masculinised. They didn’t have time to remove the addition made to the flag. So they explained the issue to Madam Bandaranaike, who saw no problem with the additions and approved the logo. This indicates that a new flag was designed for the Republic, but what came of it is unknown. Perhaps the design included the Royal Standard of Sri Wickrama Rajasinghe.

The design made by the Late Roland Silva was an amendment to the flag for the Republic. Plaques on the wall of Chelsea Hospital help in identifying them. He had proposed to have the Royal Standard of the King which is said to have been placed in the middle of the three flags. The Flag of the King was taken earlier to the Headquarters of the British Army in India to be shipped to London, to be laid at the feet of the King of England.

Source:Daily Mirror.lk

Another Iranian vessel stranded off Sri Lanka coast

A humanitarian crisis is unfolding off the coast of Sri Lanka as a second Iranian vessel has been reported stranded near Panadura, carrying nearly 300 children in desperate need of supplies.

The Iranian Embassy in Colombo has issued an urgent appeal to Sri Lanka’s Ministry of Defence, requesting 24-hour access to a local port to secure essential food and drinking water for those on board.

Sources indicate that while the request was initially met with administrative silence, a high-profile diplomatic intervention has since cleared the way for the vessel to dock.

The situation came to light earlier today during a visit by former President Ranil Wickremesinghe to the Iranian Embassy.

Mr. Wickremesinghe had arrived to sign the book of condolence following the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei.

During the visit, embassy officials reportedly briefed the former president on the stranded ship’s dire circumstances and the pending request for humanitarian assistance.

Following this meeting, the Governor of the Western Province, Hanif Yusoof, reportedly intervened to apprise the President of the situation.

Current reports suggest that, following this high-level mediation, the vessel has finally been granted permission to enter a Sri Lankan port on humanitarian grounds.

This latest maritime incident adds a layer of complexity to an already volatile regional situation.

Only yesterday, an Iranian naval vessel was reported in distress approximately 40 nautical miles off the coast of Galle.

The incident coincided with a provocative claim from US Defense Secretary Pete Hegseth, who said that an Iranian warship had been struck and sunk by a torpedo in the Indian Ocean.

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