Getting Out of Taxable and Central Bank Backed Assets

Given your political hue, you may argue that through the debt to equity swap Sri Lanka effectively got China to build a port in Hambantota giving Sri Lanka over 50 percent of the equity in return for land or that Sri Lanka just gave up the potential to reap the entire profit of the bunkering ... Read More

Moving Out of Money

We aren’t getting an inflation targeting mechanism in the near future. To paraphrase the words of the outgoing Central Bank Governor, it is unlikely that given the political situation such a ground-breaking piece of legislation will be passed in parliament. An inflation targeting regime was to be combined with an independent central bank. The Central ... Read More

The 20th Amendment

Pass the 20th amendment to the constitution and go for a parliamentary election. This would be the best thing for Sri Lanka at the moment. Going for a parliamentary election in a few months’ time wherein even if the UNP wins they will have to deal with an SLPP president is not an ideal situation. ... Read More

Power Grab

This is based given the timing and implicit manifesto of the Presidential bid orchestrated by Mangala Samaraweera. As perceived by many in internal party member dialogues this has been characterized as a bid for the Prime Minister’s Post by Mangala. His supporters frame it as the last chance to beat Gotabhaya Rajapaksa’s bid. This is ... Read More

The Capital Market Cure

The Monetary Board in conjunction with the Central Bank is busy creating a policy to create systems whereby there is better transmission of monetary policy. The situation has become quite dire as the Central Bank seems to have lost control over interest rates. This is most evident in the Central Bank imposing regulation limiting the ... Read More

The Politicisation of Inflation

Sri Lanka’s is currently in the process of amending its monetary policy. We are moving towards an inflation targeting central bank. The proposed new law is at the stage where the dinosaurs in parliament oppose it on grounds of tradition[1]. Quoting from the referenced link; The requirement that a particular policy be adapted by the ... Read More

Where is Regulatory Energy Focused?

The Central Bank has been taking out all its regulatory energy[1] on the Non-Bank Financial Institutions. The current 25 percent cap on ownership targets only the NBFI sector. The earlier guise to this regulatory movement was the need to be compliant with BASEL 3. However, the not so subtle true purpose of the regulation is ... Read More

Political Volatility and Creating a Narrative

The recent Easter Sunday bombings, the subsequent politically backed mob violence[1], and the release of a divisive figure all increase political volatility. This volatility if carefully managed can be used to create a change of power. Let it be noted that the divisive figure was jailed for criminal intimidation[2].               Sirisena is borrowing tactics from ... Read More

Our Debt to China Extended

“The available statistics appear to show that, whether the phenomena are connected or not, the rise of prices has nearly been proportional to the increase of currency”[1] J M Keynes on India “Apart from the fluctuations of the seasons the Indian level of prices is most influenced at the present time by the extent to ... Read More

The CSE can if the SEC won’t

Recently at a Capital Markets Conference hosted by UTO EduConsult, I had the privilege of listening to one Thilan Wijesinghe. Thilan who was quite on edge went on for about an hour speaking on how the current sentiment within the capital market is warranted. Then he joined a panel discussion wherein he restrained himself considerably. ... Read More