- Bangladesh Preferential Trade Agreement to be finalised
Sri Lanka and Bangladesh will be finalising a Preferential Trade Agreement (PTA) within the next three months, which would initially include 100 products from each party, The Morning Business learnt.
Well-placed diplomatic relations sources revealed that both countries had engaged in three to four rounds of discussions in relation to this PTA and that discussions are being carried out virtually. It was further divulged that both countries are currently engaging in stakeholder consultations.
During discussions, both countries had agreed that based on the mutual success of the first stage of the PTA, it would be expanded to another 100 products.
The sources further revealed that if the above-mentioned PTA proves to be mutually beneficial for both countries, they agreed that they will pursue expanding the PTA into a Free Trade Agreement (FTA).
- Business confidence boosts
The LMD-NielsenIQ Business Confidence Index (BCI) has edged up by two basis points from the previous month to register 124 in February, which represents a 10-month high.
This means that the unique index is four notches higher than a year ago and a healthy 15 points above its 12-month average of 109.
As for other comparisons, the BCI is now only two points shy of its all-time average (126) and it has gained momentum since the pandemic surfaced in early 2020 – in April that year for example, the index stood at 93, and it hovered at around the 90 mark when the second and third waves of Covid-19 induced lockdowns and ‘travel restrictions’ took effect.
- January remittances hit 13-year low
Sri Lanka has recorded its lowest foreign worker remittances over the past 13 years in January 2022 with remittances falling to $ 259.2 million.
Consequently, foreign worker remittances in January 2022 fell 61.6% year-on-year (YoY) to $ 259.2 million from $ 675.3 million in January 2021.
In terms of Sri lankan Rupees, remittances in January 2022 fell to Rs. 52.2 billion from Rs. 128.6 billion in January 2021, which is a decrease of 59.4% YoY.
- Forex kerb market premium keeps shooting up
Despite the measures implemented by the Central Bank of Sri Lanka (CBSL) to tackle the increasing influence of the local foreign currency kerb market, which included introducing an incentivised exchange rate of Rs. 210 and threats of legal action against those engaging in foreign currency exchange through unofficial channels, it appears that the kerb market has continued to flourish, offering exchange rates as high as Rs. 260.
Speaking to The Morning Business last Monday (28 February), a source with intimate knowledge of foreign currency dealing in the kerb market pointed out that the premium offered by the kerb market has increased to around Rs. 40-60, from a premium of Rs. 30-40 before December 2021, since the CBSL introduced its carrot-and-stick policy in early December 2021 to tackle the issue of the decrease in foreign worker remittances earned through official channels and the increased reliance on unofficial channels of money changers such as ‘undial’ or ‘hawala’.
- Kapruka Remittance commences discussions with PayPal
Kapruka Holdings PLC Founder and Chairman Dulith Herath has announced that negotiations are currently ongoing with PayPal to facilitate PayPal payments through ‘Kapruka Remittance’.
This announcement was made by Herath on his official Twitter handle where he stated: “Getting PayPal to Sri Lanka one way or the other has always been on my cards. Soon, PayPal payments via Kapruka Remittance could become a reality! This will greatly benefit freelancers in Sri Lanka and small exporters.”
If this development comes to fruition, Kapruka and Herath would have achieved what successive governments since 2012 have failed to achieve despite making numerous promises of facilitating inward remittances through PayPal.
- Ukraine-Russia conflict to weigh down SL tourism
The Russian invasion of Ukraine which Russian President Vladimir Putin calls a “special military operation,” is anticipated to affect the Sri Lankan tourism industry drastically as both the countries are among the top five tourist markets for Sri Lanka in 2022 per the Ministry of Tourism.
Speaking to The Morning Business, Ministry of Tourism Secretary S. Hettiarachchi stated last Monday (28 February): “Sri Lankan tourism would, in fact, get affected because the highest tourist arrivals are currently reported from Russia, while Ukraine is also among the top five countries.”
In accordance with the statistics provided by the Sri Lanka Tourism Development Authority (SLTDA), as at 1 February (from 1 January), the Russian Federation has reported the highest number of arrivals to the country with 13,478 tourists, while Ukraine has been placed as the third country with the highest tourist arrivals to Sri Lanka with 7,774 Ukrainian tourists.
- CPC to finalise tender with IOC
The Ministry of Energy is currently finalising a tender with the Indian Oil Corporation (IOC) to supply fuel to Sri Lanka under the $ 500 million Line of Credit (LOC) for the purchase of petroleum products provided by the Export Import Bank (EXIM) of India in January.
Speaking to The Morning Business last Sunday (27 February), Ministry of Energy Secretary K.D.R. Olga said: “The calls for tender with regard to the $ 500 million Indian fuel credit line were closed on Friday (25 February) and we are currently evaluating the bids we have received and will be coming to a final decision within the next two days.”
Commenting further, she stated that the details regarding the bids received couldn’t be disclosed due to ethical reasons since the ministry is currently carrying out the evaluations of the bids, and therefore, stated that the final decision will be announced by Tuesday (1).
- BOI eyes re-investments to reduce trade deficit
The Board of Investment of Sri Lanka (BOI) recently unveiled its Corporate Strategy for the period from 2022 to 2026 with the aim of attracting re-investments in order to reduce the trade deficit.
This took place during a full-day workshop on the organisation’s Strategic Framework under the guidance of BOI Chairman Eng. Raja Edirisuriya, Director General Renuka Weerakone, and the senior management representing a cross-section of all zones and departments within the organisation.
Consideration of the key factors amongst many resulted in a strategy framework formulated to “attract new investment and re-investments to reduce trade deficit, create meaningful employment, promote technology transfer, and develop infrastructure”.
- Lisa Kaestner appointed as IFC Country Manager
Caption: IFC Country Manager for Sri Lanka and the Maldives Lisa Kaestner
Washington-based International Finance Corporation (IFC) has appointed Lisa Kaestner as the new Country Manager for Sri Lanka and the Maldives. Based in Colombo, Kaestner will focus on diversifying and growing IFC’s portfolio while helping strengthen the private sector in both countries and promoting inclusive growth.
Commenting on her new role, Kaestner stated: “Sri Lanka and the Maldives have demonstrated their resilience against multiple headwinds over the years. Both countries have immense potential – especially in terms of human capital. I look forward to continuing and deepening IFC’s strong partnership with the private sector and the Governments of Sri Lanka and the Maldives in supporting social and financial inclusion, strengthening innovation and growth-enabling sustainable infrastructure, as well as in promoting a resilient recovery from the pandemic.”
- Oil hits $ 113 a barrel
Oil prices have surged despite new measures aimed at calming markets worried by the invasion of Ukraine.
Brent crude – the international benchmark for oil prices – has hit $ 113 a barrel, marking the highest level since June 2014.
It rose even after the International Energy Agency’s members agreed to release 60 million barrels of oil from emergency stockpiles.
- Ship carrying 4,000 luxury cars sinks
A cargo ship that was carrying thousands of luxury cars has sunk off the Portuguese Azores archipelago, nearly two weeks after it caught fire.
The ship, named Felicity Ace, was transporting around 4,000 cars such as Porsches and Bentleys.
The vessel was on its way to Rhode Island in the US from the German port of Emden when the fire broke out.
- Disney, Warner, Sony halt release of films in Russia
Warner Bros, Disney, and Sony have halted the release of films in Russian cinemas, after the invasion of Ukraine.
The announcements mean the releases of major movies The Batman, Turning Red, and Morbius will now not go ahead as scheduled in the country.
They come as governments around the world have been ramping up their sanctions against Moscow.
In recent days global corporations, including car makers and energy giants, have cut business ties with Russia.
- Toyota closes Japanese factories after suspected cyber-attack
Toyota shut down all 14 of its factories in Japan last Tuesday (1) after a possible cyber-attack.
News site Nikkei, which first reported the shutdown, said supplier Kojima Industries Corporation suspected it had been hit by a cyber-attack, causing a halt in production.
Japanese factories account for about a third of Toyota’s production.
- Target to invest $ 5 b to increase retail growth
Target will invest up to $ 5 billion this year in physical stores, remodels, new brands, and expanding its online fulfilment as the discounter continues to drive sales growth and differentiate itself from rivals.
The plans, announced last Tuesday (1) at its annual investor meeting held in New York, include opening 30 new stores – from midsize locations in dense suburban areas to small stores in cities like Charleston, South Carolina. It also plans to remodel 200 of its existing stores. The Minneapolis retailer also aims to roll out brand partnerships, including opening 250 more Ulta Beauty shops in its stores, with plans to eventually operate 800 shops.
- Fewer Americans collecting jobless aid since 1970
The number of Americans collecting unemployment benefits fell to a 52-year low after another decline in jobless aid applications last week.
Jobless claims fell by 17,000, from 249,000 to 232,000 for the week ending February 19, the Labour Department reported on 24 February.
The four-week average for claims, which compensates for weekly volatility, fell by 7,250 to 236,250. It was the third straight week of declines after rising for five straight weeks as the Omicron variant of the coronavirus spread, disrupting business in many parts of the US.
- World Bank approves $ 1 b to fund Afghanistan
The executive board of the World Bank has approved a plan to use more than $ 1 billion from a frozen Afghanistan trust fund to finance urgently needed education, agriculture, health, and family programmes, the bank has announced.
The plan, which will bypass sanctioned Taliban authorities by disbursing the money through United Nations agencies and international aid groups, will provide a major boost to efforts to ease the country’s worsening humanitarian and economic crises, the bank said last Tuesday (1).
The approach “aims to support the delivery of essential basic services, protect vulnerable Afghans, help preserve human capital and key economic and social services, and reduce the need for humanitarian assistance in the future,” the bank said in a statement.
- China set to approve third batch of localities for digital yuan trials
China will soon approve the third batch of localities set to launch trials of its digital yuan currency, State-backed financial outlet Securities Times reported last Wednesday (2).
According to the newspaper, a number of cities and regions have applied to authorities for permission to roll out testing of the digital yuan.
- Neste says to become first global renewable fuels producer
Finnish refiner Neste said last Tuesday (1) its billion-dollar investment in a joint venture with US-based oil company Marathon Petroleum Corp (MPC.N) would make it the world’s first and only renewable fuels maker with global capacity.
Marathon Petroleum and Neste announced on Tuesday they would convert Marathon’s Martinez, California refinery into a renewable fuels production facility to make renewable diesel from residues.
(Sources; CNN, BBC, Al Jazeera, Reuters)