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Sri Lanka economy gains momentum gradually

Sri Lanka’s economic recovery has gained slight momentum with the restoration of political stability in the country gradually all most two months after the end of President Maithripla Sirisena’s gamble of changing governments, economic analysts said.

One of the notable developments after the ending of 52 day political impasse was the slight increase in tea and rubber exports and improvement in foreign reserves, Central Bank announced this week.

Despite trade union action in the plantation sector towing wage hike, there was good demand for Ceylon tea with a total of 7.2 million kgs came under the hammer this week.

There was good demand for tea from shippers to CIS, Turkey, Syria, Libya, Iraq, Saudi Arabia and Dubai.

Ex-Estate offerings totalled 1.0 million kgs. Improved demand for a selection of teas in the Best and Below Best categories.

Best Western BOP - select invoices gained Rs. 20/- per kg and more following special inquiry, whilst the others were irregular. Corresponding BOPF gained Rs. 20-30/- per kg and more.

In the Below Best category, better BOP/BOPF gained Rs. 20-40/- per kg, whilst the others were firm and dearer to a lesser extent..

During the year of 2018, domestic tea production reported a decline mainly due to the effect of decling auction prices and adverse weather conditions.

Production of rubber also declined considerably due to lower auction prices.

During the year up to 08 February 2019 the Sri Lanka rupee appreciated against the US dollar (2.9 per cent), Central Bank said.

Given the cross currency exchange rate movements, the Sri Lanka rupee appreciated against the pound sterling (0.9 per cent), the Japanese yen (2.3 per cent), the euro (3.8 per cent) and the Indian rupee (4.9 per cent) during this period.

Howeve,r trading at Colombo Stock Market has failed to gain expected momentum during the week ending Friday 8 February.

By 08 February 2019, the All Share Price Index (ASPI) decresed by 0.3% to 5,964.1 points and the S&P SL 20 Index decreased by 0.47% to 3,058.1 points, compared to the previous week.

The total outstanding market liquidity was a deficit of Rs. 106.15 bn by end of the week, compared to a deficit of Rs. 106.12 bn by the end of last week.

The reserve money increased compared to the previous week mainly due to increase in currency in circulation During the period, crude oil prices showed a mixed performance

The gross official reserves were estimated at US dollars 6,141.6 million as at 31st January 2019.

(LI NEWS)

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