Article by The Island on September 21, 2018

Written by Sanath Nanayakkare

News RemittancestoSriLankasaturating economist

Numbers show that Sri Lanka's worker remittances are saturating, therefore, other sources of inflows need to be leveraged, to cover the shortfall and strengthen the position of the country's current account of the balance of payments (BOP), Shiran Fernando, chief economist of the Ceylon Chamber of Commerce (CCC) said in Colombo yesterday. 

Shiran made this comment while giving an overall picture of the economy covering foreign direct investment, macro-economic stability, trade facilitation agreements, potential areas for collaboration etc. at the Sri Lanka-India business networking event hosted by the CCC at the Colombo Hilton. 

"Despite external stresses in the current challenging times, Sri Lanka has continued to see in 2017 and in the first halfof this year a BOP surplus which is quite positive in terms of maintaining an overall balance of payment which we have not seen in many countries in the region", he said. 

The Sri Lankan currency moves with external volatility, and at times due to speculation. With the market determinants in place, the rupee depreciation takes place in line with external factors. Intervention of the Central Bank would happen when speculation could have an impact exceeding the market determinants. Previously the Central Bank defended the rupee with the reserves and kept the rupee at expected levels. But now a market determined value for the rupee is been sought, he told the Indian trade delegation. 

"If you look at where exports are going, Sri Lanka is still very much dependent on tea, rubber and coconut. products. The current drive is to diversify the export basket of Sri Lanka. To that effect the government recently launched the National Export Strategy which looks at six key sectors:, he said. 

At the WTO level, Sri Lanka is one of the signatories to Trade Facilitation Agreement and with that the country is committed to making business more friendly, reducing red tape and bureaucracy.. To that effect, we saw the trade information portal being launched recently expanding opportunities for international trade. The new Foreign Exchange Act too would facilitate doing business in Sri Lanka. 

"I think there are plenty of investment opportunities for you in Sri Lanka. The Chamber sees trade delegations visiting Sri Lanka on a monthly basis to explore these opportunities", he said. 

Rajendra Theagarajah, Chairman CCC invited the Indian delegation to have B2B meetings soon after the formal proceedings were over. Ramesh Agrawal , President, Merchant Chamber of Commerce and Industry of India expressed his confidence that positive outcomes would come from the meetings for both Sri Lanka and India.

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