Sri Lanka shares down; rupee fall speculations weigh

Sri Lanka stocks fell on Wednesday (01) from a record closing high hit on the previous session as investors booked profits amid fears of a rupee depreciation amid speculation over the island nation seeking an IMF program to instill investor confidence, brokers said.

Central Bank Governor Ajith Nivard Cabraal last week said the IMF could ask the country to depreciate the rupee under its reform agenda if Sri Lanka goes to the global lender.

“Speculations regarding an IMF programme contributed to the fall today along with the CLC (Commercial Leasing and Finance Plc) mainly dragging the index down” a Colombo based broker said.

“Other than that the market was volatile throughout the day.”

All Share Price Index fell 0.27 percent or 30.65 points lower at 11,409.88.

The S and P SL20 index of the most liquid share rose 0.86 per cent or 33.38 points to close at 3,909.34.

Some stockbrokers said speculation over steep depreciation of the rupee has raised some concerns among foreign investors, who on Tuesday sold a net 55 million rupees worth of shares, extending the net foreign inflow to 49.6 billion rupees so far this year.

Sri Lanka’s President said over the weekend he will have to take a lot of unpopular decisions, which investors speculate could be a rupee depreciation.

A currency depreciation will help companies with export business to earn more profit in local currency.

With the new Omicron variant being identified and the fear of other businesses getting affected, more investors seemed to move for the health sector and export-oriented stocks, stockbrokers said.

The day’s turnover was 11 billion rupees above this year’s average daily turnover of 4 billion rupees.

The fall was led by Commercial Leasing and Finance Plc, LOLC Finance and Dialog Axiata.

Commercial Leasing and Finance Plc fell 7.75 percent to close at 61.90 rupees a share and LOLC Finance closed 5.69 percent down at 26.50 rupees a share.Dialog Axiata closed 1.79 percent down at 11.00 rupees a share.

Expolanka, the market heavyweight which has a significant component of export and freight business, gained 1.07 percent to close at 284.50 rupees a share.

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Deradicalisation regulations stoke more radicalisation in Sri Lanka

On 12 March 2021, new ‘Deradicalisation from Holding Violent Extremist Religious Ideology‘ regulations were issued under the Prevention of Terrorism Act (PTA) in Sri Lanka.

The PTA is a draconian law that does not adhere to human rights standards and for decades has enabled gross violations against Sri Lankan citizens through arbitrary arrest, detention, torture and the denial of fair trial. The state — which has predominantly used the law against Tamils — began using the law against Muslims after the 2019 Easter terror attacks. The deradicalisation regulations allow law enforcement to send people who surrendered or were detained under the PTA, or emergency regulations issued after the Easter attacks, to ‘rehabilitation’.

The regulations create a new predictive style of offence based on a broad legal definition that enables the arrest and detention of citizens contrary to the procedure set out by Sri Lankan law and international human rights standards. The regulations allow investigations to commence after an arrest — depriving persons knowledge of the reason for their arrest. The subjective determination of what is deemed an offence risks the decision being influenced by personal prejudice and unconscious bias.

The regulations also violate the right to a fair trial because they allow a person to be deemed guilty and subject to rehabilitation for up to two years without trial — a decision made solely on the recommendation of Sri Lanka’s Attorney General. There is no mention of the criteria by which the decision to send a person to rehabilitation is made, nor is there information on the contents of the rehabilitation program.

The regulations are similar to those issued in 2011, which enabled persons against whom there was inadequate evidence to indict to be ‘rehabilitated’ if the government presumed they were part of the Liberation Tigers of Tamil Eelam.

Evidence that the current regulations will be used in a similar manner can be found in Sri Lankan Commissioner General of Rehabilitation Major General Darshana Hettiarachchi’s statement that even those with ‘no direct links to the 2019 April attacks will be rehabilitated’. This means that people like the young men who were arrested and detained in 2020 after being lured into a one-day training camp by Zahran Hashim (the person identified as the mastermind of the 2019 Easter bombings) are likely to be sent to rehabilitation.

Despite government claims that the regulations will deradicalise, even a cursory understanding of Sri Lankan history suggests the opposite. Anti-Muslim attacks are not new to Sri Lanka. Mutual distrust between Muslims and the state as well as distrust between Sinhalese and Muslim communities has deep roots. Following the end of the armed conflict in 2009, Sinhala–Buddhist majoritarianism fuelled by the powerful Rajapaksa family provided the backdrop for anti-Muslim acts launched by extremist Buddhist groups like the Bodu Bala Sena, many of which had government support.

Headed by former Sri Lankan prime minister Ranil Wickremesinghe, the government elected in 2015 not only failed to proactively identify and address the root causes of bigotry, it also made discrimination against Muslims publicly acceptable. Policies such as the niqab ban, as well as inaction in countering anti-minority sentiment and backlash, created a sense of impunity and emboldened sections of the public to openly engage in bigotry.

Lawyers not only refused to represent those arrested after the Easter attacks, but also tried to prevent others representing arrested persons. Senior state officials posted anti-Muslim messages on their Facebook accounts, while others circulated WhatsApp messages calling on people to boycott Muslim businesses. Many Muslim businesses in Sri Lanka’s North Western Province were instructed to leave the area, while Muslim women wearing Hijabs were refused treatment at hospitals.

Since the election of Sri Lankan President Gotabaya Rajapaksa’s government in November 2019, anti-Muslim rhetoric and action has intensified. This has been evidenced by the ban on Muslims burying their COVID-19 dead, as well as the appointment of Galagoda Aththe Gnanasara — a hardliner monk who has propagated and incited violence against Muslims — as head of the presidential task force, ‘One Country, One Law’. In this context, many Muslims say they feel abandoned by the state, an institution they view as an aggressor and potential violator of their rights.

Repressive measures that violate civic rights, perpetuate ethno-religious stereotypes and encourage racial profiling, like the new deradicalisation regulations, are likely to have limited success and ultimately act as drivers of radicalisation. They stoke rather than address the root causes of radicalisation. The PTA has been retained by successive governments with the supposed aim of making people safe by targeting so-called deviants and would-be terrorists. In reality, the PTA has demonised, marginalised and created insecurity — first for Tamils, then for Muslims and now for political dissidents.

As part of the human-rights-deficient counter-terrorism framework of the Sri Lankan state, these regulations enable the expansion of the state security apparatus and the entrenchment of arbitrary and abusive state action. Treating certain communities — many of whom live under constant siege in fear of discrimination and violence — as second-class citizens creates insecurity for all.

On 5 August 2021 the Supreme Court issued an interim order suspending the operation of the regulations, which has been extended, while it hears several fundamental rights petitions challenging the regulations.

EAF (Source)

CB to freeze bank accounts using unlawful money transfer methods

Bank accounts of those who distribute & receive money through unlawful money transfer methods will be frozen with immediate effect, Central Bank Governor Ajith Nivard Cabraal said.

The Governor also urged all migrant Sri Lankans to use only legal channels to repatriate their earnings.

Earlier, the Central Bank announced that migrant workers will be able to fetch an additional Rs. 10 for every US Dollar they convert into rupees this month. The offer is for US Dollar conversions done via the Sri Lankan banking system and other formal channels.

Sri Lanka briefs Special Rapporteur on efforts to eradicate child labour

Sri Lanka briefed the UN Special Rapporteur on Contemporary Forms of Slavery on efforts taken to eradicate child labour.

The United Nations Special Rapporteur on Contemporary Forms of Slavery including its causes and consequences Tomoya Obokata, who is currently undertaking a visit to Sri Lanka at the invitation of the Government of Sri Lanka, called on Foreign Minister Prof. G.L Peiris at the Foreign Ministry.

The mandate of the Special Rapporteur includes but is not limited to issues such as: traditional slavery, debt bondage, forced labour, children in slavery and slavery-like conditions, sexual slavery, forced and early marriages as well as issues faced by migrant workers and foreign labour.

During the meeting, the Foreign Minister discussed Sri Lanka’s progress related to labour welfare and the constructive steps taken by the government to eradicate child labour. He also elaborated on steps taken to bring our labour laws in line with international standards in a number of areas including child labour, migrant workers and debt bondage. The Special Rapporteur commended Sri Lanka on the progress made with regard to making Sri Lanka a ‘child labour free zone’.

The Foreign Minister outlined that Sri Lanka was conscious of protecting vulnerable labour groups and emphasized that Sri Lanka will continue to cooperate with the United Nations system. He stated that visits by Special Procedures Mandate Holders have been helpful in enhancing understanding of the specificities of Sri Lanka’s experiences in related fields as well as in improving domestic processes to be in line with our international commitments.

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Basil meets Indian counterpart, discusses enhancing economy cooperation

Basil Rajapaksa, Minister of Finance sought ways and means of further enhancing economic cooperation with India, when he met the Finance and Corporate Affairs Minister of India Smt. Nirmala Sitharaman in New Delhi, today (01 Dec.)

The Finance and Corporate Affairs Minister of India and Basil Rajapaksa, Minister of Finance discussed a range of issues pertaining to bilateral economic cooperation.

Basil Rajapaksa, Minister of Finance had thanked for the support that India has provided to Sri Lanka in many different spheres through her economic cooperation programmes.

They discussed ways and means by which the existing bilateral economic cooperation programmes between the two countries could be further developed and enhanced.

An economist by profession, Smt. Nirmala Sitharaman has been the Finance and Corporate Affairs Minister of India since May 2019.

Prior to that, she was the Minister of Defence from 2017 to 2019.

Smt. Sitharaman has also served as the State Minister of Finance and the State Minister (Independent Charge) of the Ministry of Commerce and Industry.

S R Attygalle, Secretary to the Treasury and Ministry of Finance, Sri Lanka’s High Commissioner to India, Milinda Moragoda and officials were also at the discussion

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RW not joining government

United National Party (UNP) Leader Ranil Wickremesinghe has no intention of joining the Government, sources close to the former Prime Minister told Daily Mirror last night.

Speculation arose that Wickremesinghe is to join the Government after it was announced he will attend the 5th Indian Ocean Conference scheduled to be held in Abu Dhabi together with President Gotabaya Rajapaksa.

However, UNP sources rubbished the claims saying he is focused on strengthening the party with the support of young processionals.

Sources said that Wickremesinghe has been invited to attend the 5th Indian Ocean Conference in Abu Dhabi from the 3rd to the 5th of December 2021.

Wickremesinghe is the former Chairperson of the Indian Ocean Conference, having held the position from 2016 to 2019. He is scheduled to address the gathering on the 5th of December.

Wickremesinghe will be joined by international dignitaries including President Gotabaya Rajapaksa, India’s External Affairs Minister S. Jaishankar and Singapore’s Minister of Foreign Affairs Vivian Balakrishnan.

President, Ranil & Indian Foreign Minister to meet in Abu Dhabi!

Former Prime Minister and UNP leader Ranil Wickremesinghe has been invited to attend the 5th Indian Ocean Summit to be held in Abu Dhabi from 3rd to 5th of December 2021.

Wickremesinghe is scheduled to address the conference on December 05th.

The theme of this year’s conference is “Ecology, Economy, Epidemic”. Discussions will focus on how the Indian Ocean Region will combat the growing threat of climate change.

Ranil Wickremesinghe is the former Chairperson of the Indian Ocean Conference, having held the position from 2016 to 2019.

Wickremesinghe will be joined by President Gotabaya Rajapaksa, India’s External Affairs Minister S. Jaishankar and Singapore’s Minister of Foreign Affairs Vivian Balakrishnan.

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Cabinet green light to import 20,000 MT of rice from Myanmar

The Sri Lankan Cabinet of Minister has granted approval to import 20,000 Metric Tonnes of rice from Myanmar on the basis of a Government to Government agreement.

The agreement between the governments of Sri Lanka and Myanmar would see that a Metric Ton is purchased at a cost of US$ 460, said the Government Information Department.

It added that the purchasing would be carried out by the Sri Lanka State Trading (General) Corporation.

Sri Lanka inflation hits 12-year high in Nov 2021 amid money printing

Sri Lanka’s inflation accelerated to 9.9 percent in the 12-months to November from 7.6 percent in October, in the wake of record money printing for over two years, while policy in reserve currency central banks also deteriorated.

The Colombo Consumer Price Index jumped 2.6 percent in the 30-day of November. Food prices jumped 5.3 percent in the month, driven by rice and vegetables.

Vegetable prices rose to unusual levels in November amid rains. But non-foods jumped 1.2 percent after jumping 1.5 percent a month earlier.

The 12-month inflation is the highest recorded since January 2009 when the index showed a 10.4 percent after a base change.

Sri Lanka has recorded 9.8 percent inflation in January and February 2013 when the credit system was recovering from a 2011/12 currency crisis.

Food prices rose 17.5 percent during the past 12 months, partly driven by unusually high vegetables.

Rice prices are kept up with import controls after printing money.

Over two years food prices had risen 29.5 percent.

Since August 2019 when the central bank ended prudent policy and began the current bout of inflationary policy by purchasing bonds to inject money, food prices have risen 34 percent. Headline inflation, made up by adding more services and other items which grows more slowly is up 15.9 percent.

Sri Lanka’s central bank has promised to only create inflation of 4-6 percent a year. However since aggressive call money rate targeting with excess liquidity began Sri Lanka has been experiencing currency crises every 2 to 3 years.

Sri Lanka stocks hit a new record on Tuesday rising 2.13 percent.

From July 2019 to September 2021, the central bank has printed 1.48 trillion rupees. Foreign reserves have fallen from

Global monetary policy has also deteriorated coming from the US Fed and other reserve currencies. Post World War II money printing central banks have earlier blamed inflation on wage-spiral inflation, the oil shock and overheating.

The current excuse is supply chain bottlenecks.