National default, see inflation surge to 40%: Sri Lanka latest

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(Bloomberg) —Sri Lanka has fallen into default for the first time in history as the government struggles to stop the economic collapse that caused the economic crisis and has made street protests against rising costs of everything from food to fuel.

National policymakers have reported to creditors that the island nation has been unable to make payments within the grace period and is therefore in a preemptive default, central bank governor Nandaral Weerashinge said in a briefing Thursday. rice field.

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Prime Minister Ranil Wickremesinghe has not yet selected a finance minister to help lead negotiations with the International Monetary Fund on the terribly needed aid.

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Sri Lanka warns that inflation could rise to 40% as it defaults, Sri Lanka expects inflation to reach 40% after maintaining interest rates

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Stock Market Fall (12:20 pm)

The Colombo Equity Index fell by more than 3% in global equity sales.

Sri Lanka expects inflation to reach 40% in the coming months (11:42 am)

Inflation is the highest in Asia, currently around 30%, and the number is expected to surge to 40% in the coming months, according to a central bank manager.

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Weerasinge told reporters in the capital Colombo that the country would limit the amount of foreign currency its citizens could hold to $ 10,000.

The country is having a hard time finding dollars to pay for imports of everything from food to fuel to life-saving medicines.

Prime Minister deals with cooking gas shortage (11:20 am)

Wicklemesinge said the supply of cooking gas, which was supposed to be unloaded on Wednesday, has not yet arrived. The Prime Minister asked the chairman of LitroGas, the country’s leading LPG provider gas supplier, to explain the delay.

Sri Lanka holds tolls during debt crisis (7:30 am)

The Central Bank of Sri Lanka maintained its benchmark permanent lending facility rate at 14.5% on Thursday. In a Bloomberg study, five out of eight economists expected an increase of up to 300 basis points, and three expected a hold.

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Previous rate hikes had little effect on cooling inflation and are now around 30%. This is because the country is struggling to pay for imports and is short of everything from food to fuel.

Opposition asks tourists to visit Sri Lanka again (7 am)

Opposition leader Sajith Premadasa used a parliamentary speech to pitch tourists to visit as the country struggled to rebuild its highly needed foreign exchange reserves. His party tweeted a video clip of Premadasa promoting Sri Lanka’s surf spots and attractions.

Draft Constitution to Finalize Presidential Authority (10:13 pm)

Wickremesinge said in a tweet that a constitutional amendment that limits the broad authority of President Gotabaya Rajapaksa is expected to be completed by next week.

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He also instructed the Prime Minister’s Office staff to cut costs in half.

The minister says there is no forex to pay for a day’s fuel (2:00 pm)

“There are petrol ships in our waters,” Energy Minister Kanchana Wijesekera told Congress on Wednesday. “We don’t have forex.”

Sri Lanka “wants” to release the ship “today or tomorrow,” the minister said. He added that the country owes the same supplier $ 53 million for early shipments of gasoline.

The prime minister said the government is working to win dollars in the open market to pay for three ships with crude and furnace oil moored in Sri Lanka’s waters. He told Congress on Wednesday that the government is in talks with the World Bank to guide some of the $ 160 million in aid provided for social welfare for fuel imports.

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Stock prices continue to rise while dollar bonds are mixed (10:56 am)

Colombo’s Equity Index jumped 3.5% to its highest level since April 6th, surpassing about half of its progress. Still, the key index was on track for the fifth profit session. Rebounds of more than 20% from last month’s lows seem to suggest that equity investors have hit the worst prices.

Sri Lankan dollar bonds were traded in a mixed manner as the country officially defaulted for the first time. Debt payable in July this year was shown to be 0.24 cents higher than the dollar, while securities due in 2030 were 0.22 cents lower.

Gold could be a last resort for Sri Lankans competing for money (10:45 am)

According to Chirag Sheth, a consultant at Metals Focus Ltd, based in London, Sri Lankans could sell as much as 20% this year as people in extreme distress sell jewelry to raise money. He said. Demand for precious metals has fallen by a third in the island nation since the year before the pandemic as the tourism industry was hit.

Sales of old gold are “very good,” but “we can’t put money into stocks, banks have low interest rates, and locals are depreciating their currencies,” he said.

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