Skip to content 
Search

Latest Stories

Sri Lanka cuts rates to support economy after Easter bombings

SRI LANKA'S central bank cut its main lending rate today (31) in a bid to revive the island's economy, which was battered by the Easter suicide bombings that killed 258 people.

The Central Bank of Sri Lanka said the rate at which it lent to commercial banks was reduced by 50 basis points to 8.5 per cent to encourage borrowing and mitigate the fallout from the bombings which have scared off tourists.


Forty-five foreigners were among the dead from the April 21 suicide attacks against three Christian churches and three luxury hotels that also left nearly 500 people wounded.

"The Easter Sunday attacks have affected confidence and sentiments of economic agents, particularly disrupting tourism and related activities," the bank said.

"Although normalcy is gradually returning to economic activity, a lower than initially projected growth could be anticipated during 2019."

Sri Lanka's economic growth slowed to 3.2 per cent last year from 3.4 per cent in 2018, but had been expected to pick up in 2019 till the devastating attacks carried out by a homegrown jihadist group.

Finance Minister Mangala Samaraweera said Thursday (31) that he expected losses of $1.5 billion this year because of cancellations by foreign tourists after the bombings.

He said the government was subsidising loans to hotels.

The central bank said it did not expect an increase in inflation as a result of the latest rate cut.

"Inflation is likely to remain in the desired 4.0 to 6.0 per cent range in 2019 and beyond, supported by appropriate policy measures," the bank said.

Two weeks ago, the International Monetary Fund (IMF) released a delayed loan installment to Sri Lanka, helping the government efforts.

The global lender released $164 million under a three-year $1.5bn bailout that was suspended in October during a power struggle between the president and the prime minister.

The months-long row was resolved after the Supreme Court ruled that president Maithripala Sirisena had violated the constitution by sacking prime minister Ranil Wickremesinghe's government.

During the crisis, three international credit rating agencies downgraded the country's debt making it more expensive to borrow abroad.

Official figures show that Sri Lanka will have to repay a record $5.9bn in foreign loans in 2019. Officials say about two-thirds of it has already been paid.

(AFP)

More For You

Asian firm acquires Kings Court Hotel for £2.75m

UK-based Nanak Hotels acquired the 60-room Kings Court Hotel in Warwickshire for £2.75 million. (Photo: Colliers International UK)

Asian firm acquires Kings Court Hotel for £2.75m

UK-BASED Nanak Hotels recently acquired the 60-room Kings Court Hotel, a 17th-century property in Warwickshire, England, for £2.75 million. This is the first regional acquisition by the privately held firm led by British Indians Harpreet Singh Saluja and Karamvir Singh.

Nanak Hotels, which operates a UK property portfolio, plans to invest in the property's refurbishment and repositioning, according to a statement from Colliers International UK, which brokered the transaction.

Keep ReadingShow less
Priya Nair becomes first woman CEO in Hindustan Unilever's history

Priya Nair (Photo: Unilever)

Priya Nair becomes first woman CEO in Hindustan Unilever's history

PRIYA NAIR has been appointed as the CEO and managing director of Hindustan Unilever Ltd (HUL), effective from August 1. She will be the first woman to lead the company in its history.

The announcement was made by HUL on Thursday (10). Nair, who currently serves as president, Beauty & Wellbeing at Unilever, will take over the role from Rohit Jawa, who will step down on July 31 to pursue other interests.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy shrinks again in May, hitting Labour’s growth plans

THE UK economy contracted unexpectedly in May, marking the second consecutive monthly decline, according to official data released on Friday. The figures present a challenge for the Labour government as it attempts to revive economic growth.

Gross domestic product fell by 0.1 per cent in May, following a 0.3 per cent contraction in April, the Office for National Statistics (ONS) said in a statement.

Keep ReadingShow less
SBI UK cuts mortgage rates

The bank's commitment to green lending reflects focus on sustainability (Photo: Getty Images)

SBI UK cuts mortgage rates

BANKING major State Bank of India (UK) has cut interest rates on its buy-to-let mortgage products to help landlords reduce borrowing costs.

The bank said the rate cuts would help landlords invest in rental properties and meet growing demand for rental homes across the UK.

Keep ReadingShow less