Count it again
Sri Lanka’s government says its economy will grow at a zippy 7.5 per cent this year, making it the self-styled fastest growing economy in south Asia.
Yet on Friday morning the central bank suddenly and unexpectedly brought interest rates down by half a percentage point, citing fears of a slowdown. Something doesn’t add up. Continue reading »
It isn’t every day that a country cancels a plan to seek $1bn in emergency loans from the International Monetary Fund, just a few weeks after announcing it.
But having unveiled plans to go cap in hand for money earlier in the year, it seems this is just what Sri Lankan President Mahinda Rajapaksa is about to do, following a row with the IMF. So what exactly is going on? Continue reading »
Having been forced into a dramatic interest rate hike earlier this year to fend off a balance of payments crisis, Sri Lanka’s central bank has made more small waves in the south Asian tourist island this morning, with a rate cut.
The move caught out local analysts, as there had been no hint of a change in policy in recent weeks. Continue reading »
Actis, the emerging markets private equity fund, has invested $32m in Asiri Hospital Holdings, a private hospital chain in Sri Lanka with five hospitals under its umbrella.
Asiri will use the proceeds to buy out minority shareholders in some of those hospitals as it prepares for further expansion in the country. The deal again underlines Sri Lanka’s appeal to foreign investors, attracted by sustained GDP growth of 7 per cent a year against a backdrop of economic downturn in the west. Continue reading »
Sri Lanka’s central bank raised key interest rates for the first time in five years on Friday and directed banks to slow lending in an effort to curb credit growth and to stem the worsening balance of payments.
The repo rate rose 50 basis points to 7.5 per cent a year and the reverse repo rate rose by the same margin to 9 per cent. It came despite the central bank’s downward revision of its GDP growth forecast for 2011 to 8 per cent from 9 per cent. Continue reading »
You’ve done the elephant safari. You’ve been on the snorkelling trip. Now what you want is a few hours at a blackjack table. Or so believes the Sri Lankan government as it looks to boost tourism by throwing open its arms to foreign investment in its gambling sector. Continue reading »
Tired of the usual investment advice on the Brics? On the lookout for new up-and-coming countries? Here are few recommendations that you might not have considered.
Control Risks, a consultancy which looks mainly at political and security risks around the world, released a report called RiskMap 2012 on Monday – with some intringuing investment pointers. Its top five? Bulgaria, Colombia, Libya, Mozambique, and Sri Lanka. Continue reading »
Sri Lanka announced a shock 3 per cent currency devaluation on Monday in an attempt to boost export competitiveness and keep the country’s paymasters at the International Monetary Fund happy.
Mahinda Rajapaksa, who is both president and finance minister, made the announcement to parliament while presenting the 2012 budget. His speech – interrupted when ruling party politicians attacked protesting opposition members – included a projected 14.15 per cent increase in spending and a narrowing budget deficit based on increased revenues. Continue reading »
Far away from the sovereign credit doldrums affecting Europe, a small island state in the Indian ocean seems to be attracting the attention of foreign investors.
Sri Lanka raised $1bn on Thursday after its 10-year bond sale was seven times subscribed, in a sign that investors remain confident that the island’s sustained economic recovery is on track. Continue reading »
Sri Lanka can breathe a sigh of relief. After several months of delays, the International Monetary Fund Tuesday approved the third $400m tranche of a $2.5bn loan and agreed to extend the tenure of the programme.
The IMF had delayed disbursement of the tranche after Sri Lanka recorded a fiscal deficit of 9.9 per cent of gross domestic product in 2009, missing an earlier agreed target of 7 per cent. Sri Lanka, it appears, has come in from the cold. But it may take the country some time to fully thaw as allegations of rights abuse remain unaddressed. Continue reading »
Plenty has already been written about what the appreciation of the renminbi will mean for the Chinese economy. But what about China’s neighbours?
Johanna Chua at Citi has been looking at this very question, and come to some interesting conclusions – based on the medium-term real appreciation of the currency, rather than the immediate nominal gain. Continue reading »
It is hard to imagine things could change so much in just a year after the end of a bloody civil war. In Sri Lanka’s east, in rural Punani near the coastal city of Batticaloa, Tamil, Sinhalese and Muslim women work together in a modern factory owned by textile maker Brandix producing garments for Marks & Spencer and Tesco.
As other potential foreign investors should note, the state of the art, new factory stands in contrast to the state of this region in March last year , when the island’s civil war was still a daily reality.
Punani used to be part of the Liberation Tigers of Tamil Eelam’s eastern stronghold. The rebels, who were fighting for a separate homeland in the island’s north and east until their defeat last May, began to lose their grip on the area after the region’s commander defected to the government.
They were eventually driven out of this area after fierce fighting but last March the minefields had yet to be cleared and bands of fighters still roamed the jungles and villages. Continue reading »
Sri Lanka showed the warmth its people are known for when one of the biggest Bollywood extravaganzas, the International Indian Film Academy awards, came to town at the weekend.
Keen to repair an image battered by the country’s 25-year civil war, including allegations the military committed war crimes as the conflict drew to a close 12 months ago, the government pulled out all the stops for the awards. Continue reading »