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ECONOMYNEXT – Frustrated with the Sri Lanka’s ruling family for the government’s failure to address the economic crisis, young protesters took into Wikipedia and edited and distorted contents with humorous statements in one of the family members.

Hundreds of youth have been protesting since early last month in isolated locations, demanding the resignation of President Gotabaya Rajapaksa after the incumbent government’s economic mismanagement resulted in shortage of milk powder, cooking gas, and fuel amid extended power cuts due to lack of dollars to import diesel.

A March 31 protest turned into violence near President Rajapaksa’s private residence. Since then protests have intensified. People across the country defied Rajapaksa’s 36-hour curfew law on Sunday (03) and protested despite a State of Emergency and social media ban were in place.

Some technical savvy youth have edited some of the Wikipedia pages of Rajapaksa family members and resigned Central Bank Governor Ajith Nivard Cabraal expressing their protests.

One of the member of youth protesters said youth whose parents do not allow to take part in protests try to express their displeasure through such editing.

“I see some are lashing it out on Twitter and then I also saw others editing on Wikipedia,:” the protester said asking not to be named.

Wikipedia allows the general public to edit information to make content reliable and up to date.

However due to the heavy load of editing on certain pages, Wikipedia has taken a swift initiative to lock those pages including some political figures such as President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa, due to vandalism, edit warring and disruptive edits.

The edits consisted of changing names to the political figures and including past and present controversial statements and behavior of the politicians.

The edits are shared and circulated amongst many platforms of social media, seen as humorous content and of jovial matter by the majority.

However, ardent supporters of the Rajapaksa have claimed that such measures are of low quality and childish behavior.

Wiki pages of a few identities such as Gotabaya Rajapaksa, Mahinda Rajapaksa and Namal Rajapaksa were immediately  corrected while others were reedited even after correction by Wikipedia, a technical savvy man who monitors the Wikipedia page said.

The entire cabinet of Sri Lanka has resigned on Sunday, but President Rajapaksa appointed 4 ministers to the new cabinet on Monday, but the newly appointed finance minister resigned on Tuesday.

The Wikipidia page of former Central Bank Governor Ajith Nivard Cabraal, who resigned on Monday, saw ridiculing of his qualifications and the role he played on the economy when was the  Governor. (Colombo/April 5/2022)

ECONOMYNEXT – Sri Lanka’s stock index recovered to close 5,9  percent firmer on Tuesday (05) recouping some losses investors suffered in the previous sessions amid the ongoing economic and political crisis, brokers said.

The main All Share Price Index (ASPI) ended 5.86 percent or 482.77 points at 8,727, recovering from its lowest close since August 15.

“There was bargain hunting because the market has come down sharply,” an analyst said.

“But the market will come off after the central bank raises interest rates.”

Some analysts expect the newly appointed central bank chief Nandalal Weerasinghe to raise the rates by at least 300 basis points at the next monetary board meeting which is unscheduled yet.

Analysts previously said that the main index bottoming out around 8,000 points was a positive sign and it would move up on speculation.

Sri Lanka’s entire cabinet resigned late on Sunday due to mounting pressure by the public protests over President Gotabaya Rajapaksa’s government failing to address an economic crisis that hit the public resulting in a shortage of milk powder, fuel, and cooking gas.

People also had to suffer from extended power cuts due to a severe shortage of dollars to import diesel for power generation.

Although the government called on all parties to join them to form an interim government, oppositions by now have rejected the offer and in return called for the executive 20th Amendment to be abolished.

SL20 of the most liquid stocks gained 6.99 percent or 187.58 points higher to 2,872.40 points.

Questions still remain as to how the country is going to face the mounting debt while the rupee continues to depreciate.

The day’s turnover was 1.1 billion rupees, less than a quarter of this year’s average daily turnover of 4.8 billion rupees.

Analysts said investors are trying to shift their savings to hedge against the rupee fall and inflation, which is at a record high and more than 5 percent higher than one-year Treasury bill yield. Brokers said investors opt for stocks to hedge against inflation.

Sri Lanka’s rupee has fallen nearly 50 percent since it was allowed flexibility on March 08.

The market has lost 23 percent so far in March after falling 11 percent in the previous month. Overall the market has lost 32 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year.

Foreign investors bucked the trend and bought a net 102.7 million rupees worth of shares. However, the market has witnessed a total foreign outflow of 1.7 billion rupees so far this year.

Sampath Bank, LOLC Holdings and Royal Ceramics, moved the index up on Tuesday.

Shares in Sampath Bank gained 9.2 percent to close at 42.90 rupees a share, LOLC Holdings up 13.2 percent to close at 460.00 rupees a share while Royal Ceramics Lanka up 18.5 percent to close at 39.80 rupees a share. (Colombo/April05/2022)

ECONOMYNEXT – Sri Lanka’s secondary market closed inactive with zero transactions on Tuesday (05) market participants said while the rupee was quoted at 310 rupees against US dollar in commercial banks.

Commercial Banks were offering to sell dollars for telegraphic transfers at 310 rupees and buy between 295-300 rupees on Tuesday.

Dealers said the market did not have a proper two-way spot quote on Tuesday.

The central bank indicative spot rate was 307.78 rupees on Tuesday, down from 310.85 rupees in the previous day.

Central Bank’s telegraphic transfer dollar rate was at 293.2/303.5 on Tuesday, down from 289.7/299.9 on Monday.

Sri Lanka’s rupee has been made more flexible but a clean float has not yet been established.

In the secondary market, there were no active bond rates.

“There was not even a single transaction in the market today,” a market dealer said.

Market participants said investors were waiting for some form of stability.

“The secondary market yield curve remained broadly unchanged as the market participants opted to be on the sidelines amidst the prevailing political uncertainty,” First Capital said in its market note.

Over the weekend Sri Lanka saw anti-government protests spread across the country demanding the ruling government to step down for its mismanagement as the economic crisis throttled the common man.

Many government officials including the central bank governor Ajith Nivard Cabraal and ministers have tendered their resignation.

Following Cabral’s resignation, a monetary policy meeting that was scheduled to take place on April 05 was postponed.

Analysts say this was an important meeting in which rates were expected to be hiked further after inflation hit 18.7 percent in March.

The rate hike would have reduced money printing and domestic private credit.

Analysts had warned of triple defaults unless urgent action is taken to tighten monetary policy and restore a working exchange rate regime.

Nandalal Weerasinghe, the former Deputy Governor of the central bank is said to take over the governorship on April 07. (Colombo/Apr5/2022

ECONOMYNEXT – Sri Lanka’s secondary market remains inactive on Tuesday (05) as investors wait for stability amid the growing anti-government protests in the country, market participants said while the rupee was quoted at 310 against the US dollar with no offers.

Commercial Banks were offering to sell dollars for telegraphic transfers at 310 rupees and buy between 295-300 rupees on Tuesday.

Dealers said the market did not have a proper rupee quote on Monday.

The central bank indicative spot rate was 307.78 rupees on Tuesday, down from 310.85 rupees in the previous day.

Sri Lanka’s rupee has been made more flexible but a clean float has not yet been established.

In the secondary market, there were no active bond rates.

Market participants said investors were waiting for some form of stability.

Over the weekend Sri Lanka saw anti-government protests spread across the country demanding the ruling government to step down for its mismanagement as the economic crisis throttled the common man.

Many government officials including the central bank governor Ajith Nivard Cabraal and ministers have tendered their resignation.

Following Cabral’s resignation, a monetary policy meeting that was scheduled to take place on April 05 was postponed.

Analysts say this was an important meeting in which rates were expected to be hiked further after inflation hit 18.7 percent in March.

The rate hike would have reduced money printing and domestic private credit.

Analysts had warned of triple defaults unless urgent action is taken to tighten monetary policy and restore a working exchange rate regime.

Nandalal Weerasinghe, the Deputy Governor of the central bank is said to take over the role of Cabraal. (Colombo/Apr5/2022

ECONOMYNEXT – Nandalal Weerasinghe, a retired central banker Governor will take over as its chief this week, a media report said as Sri Lanka reels under an unprecedented currency crisis and political turmoil.

Bloomberg Newswires reported that Weerasinghe, a former Deputy Central Bank Governor will take-over from March 07.

A monetary policy meeting where policy rates were widely expected to be raised, scheduled for Monday was postponed as Nivard Cabraal resigned with a political crisis spiralling and the cabinet resigning en masse.

Sri Lanka’s rupee and the economy has been badly hit from two years of money printing which created balance of payments deficits as outflows exceeded imports and reserves were used up to redeem new money and maintain the currency peg.

A float attempted in March to balance inflows by ending sterilized interventions failed due to a surrender required that made it a peg and pushed it down (a strong side convertibility undertaking imposed on peg which was already on its weak side), analysts have said.

The rupee fell below 300 to the US dollar. The central bank on Monday published an indicative spot rate of 310 rupees. Market participants said transaction were settled around 325 rupees.

Sri Lanka has to pay about 5,880 million dollars of foreign currency denominated debt in the rest of the 2022.

Weerasinghe is taking over as the monetary authority has also borrowed through central bank and interbank swaps and has over 3.0 billion US dollars of net debt and there are problems with dollar debt of banks.

Analysts have warned that Sri Lanka is facing defaults on multiple fronts as inflation has started to gallop.

Related

Sri Lanka has to work fast to contain multiple defaults as Tanzi bites: Bellwether

India has also deferred hundreds of millions of dollars of payments due under the Asian Clearing Union due from the central bank for imports made from the country. (Colombo/Apr05/2022)

ECONOMYNEXT – Sri Lanka’s stock index plunged over 5 percent on Monday (04) before retreated slightly as political risks and economic concerns amid the resignations of entire cabinet and the central bank governor weighed investor sentiment, brokers said.

Continued nationwide anti-government protests also weighed on the investor appetite, they said.

The main All Share Price Index (ASPI) ended 2.68 percent or 226.88 points at 8,244, its lowest since August 17, 2021.”Market bottomed out today at our target 8,000 which is a positive sign,” a top analyst in Colombo said.

Sri Lanka’s entire cabinet resigned late on Sunday due to mounting pressure by the public protests after President Gotabaya Rajapaksa’s government failed to address an economic crisis which hit the public resulting in shortage of milk powder, fuel, and cooking gas. People also had to suffer with extended power cuts due to severe shortage of dollars to import diesel for power generation.

Central Bank Governor Ajith Nivard Cabraal resigned on Monday and the monetary policy announcement scheduled for Tuesday has been postponed, leading to some uncertainty in the market.

Analysts expect the market to settle around the current levels as it has already fallen steeply though there is still a lot of selling pressure.

ASPI recovered after the market reopened after a double halt in trade as the market’s most liquid index plunged over 7.9 percent.

Analysts expect the market to move up on speculations.

The market expects some positive impact from speculations that former central bank governor Indrajith Coomarswamy to be an advisor to negotiate IMF deal while retired deputy governor Nandalal Weerasinghe is expected to be appointed as the new central bank governor, analysts said.

SL20 of the most liquid stocks recovered to end at 5.16 percent or 146.11 points lower to 2,684.82 points.Analysts had cautioned that if the ASPI falls below the 10,000 mark there would be a spirally effect creating a downward trend.

As the economic crisis worsened on the island, thousands of angry protests have taken to the streets calling for the government and its cohorts to step down.

Questions still remain as to how the country is going to face the mounting debt while the rupee continues to depreciate.

The day’s turnover was 1.9 billion rupees, less than half of this year’s average daily turnover of 4.9 billion rupees.

Analysts said investors are trying to shift their savings to hedge against the rupee fall and inflation, which is at a record high and more than 5 percent higher than one-year Treasury bill yield. Brokers said investors opt for stocks to hedge against inflation.

Sri Lanka’s rupee has fallen nearly 50 percent since it was allowed flexibility on March 08.

All commodity prices in Sri Lanka are on the rise due to the currency fall. Currency dealers expect more depreciation in the coming days as the central bank devalued the rupee.

Rising oil prices, policy rate hikes, a slowing economy, and a shortage of dollars, fuel, and cooking gas along with extended power cuts continue to dampen the sentiment.

The market has lost 23 percent so far in March after falling 11 percent in the previous month. Overall the market has lost 32 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year.

Foreign investors bucked the trend and bought a net 102.7 million rupees worth of shares. However, the market has witnessed a total foreign outflow of 1.7 billion rupees so far this year.

Expolanka, LOLC Holdings and Sampath Bank,  dragged the index down on Monday

Shares in Expolanka fell 12.81 percent to close at 158.25 rupees a share, LOLC Holdings down 15.32 percent to close at 414.50 rupees a share while Sampath bank down 9.24 percent to close at 39.30 rupees a share. (Colombo/April04/2022)

ECONOMYNEXT – A collective of information and communication technology (ITC) industry leaders in Sri Lanka on Monday (04) called for transparency, stability in governance and fiscal management, access to dollars for startups and small businesses for essential services and an end to an ongoing public emergency.

Signed by over 160 industry representatives including Sanjiva Weerwarana of WSO2 and Hasith Yaggahavita of 99x, the statement said the ICT community finds it difficult to defend and justify to its stakeholders that Sri Lanka is a safe environment to build innovative businesses, products and provide continued services at global standards.

“The current situation sends dangerous signals and in fact many of our community have had to start looking outside of Sri Lanka for the continued delivery of their products and services. The economic impact created by the current situation further compounds the challenges faced by our early-stage companies and will prevent necessary investment and risk capital to come into the country. We beseech the government to repeal the State of Emergency as this is causing more uncertainty amongst our stakeholders,” the statement said.

Sri Lanka has seen a wave of public protests, most of them seemingly spontaneous and with no involvement of opposition parties, against President Rajapaksa and the ruling Sri Lanka Podujana Peramuna (SLPP)-led government over their handling of the one of the worst economic crises in the country’s history. As fuel shortages and power cuts brought about by a severe dollar shortage forced people onto the streets, culminating in a 36-curfew over the April 02-03 weekend, uncertainty looms over the fate of the government with speculation rife of mass resignations.

The signatories expressed grave concern over the public emergency declared by President Gotabaya Rajapaksa last Friday (01) in the aftermath of a protest outside his residence the previous night.

“As a community, we are gravely concerned by the declaration of the state of emergency by his Excellency the President on the night of April 1st, 2022. Our community is of the view that the declaration of state of emergency is not the solution to the present social economic situation. We believe that the right approach is in fact to open a dialogue between the political leadership and the country’s constituents,” the statement said.

Sri Lanka’s digital economy represents approximately 4.37% of GDP and, according to the statement, is positioned to grow exponentially in the coming years. 

“This ecosystem has developed itself mostly on its own, relying on the support of each other on the values of freedom of expression and collaboration. Hence this ecosystem is firmly committed to protecting people’s basic civil liberties which includes the freedom of expression and freedom of peaceful assembly,” the ICT professionals said. 

“This community for its part is committed to protecting the rights of its constituents and the basic civil liberties we expect of a democratic nation state. We believe that the decisions that affect the country need to be participatory and collaborative with our industry,” it added.

The industry leaders called on the government to: 

Ensure stability in governance and fiscal management of inflation to provide overall confidence to the ICT community. 
Improve decision making by the government to provide the minimum power required for the continuity of our industry and introduce incentives immediately for solar and other renewable energy solutions. 
Provide access for startups and small businesses to the minimum dollars required to pay for essential services not available locally. 
Remove emergency, curfew, and suppression of citizens’ rights to peacefully protest and or express displeasure of what they are experiencing as severe hardships.
Refrain from blocking access to the internet and all social media sites during states of emergencies that completely deny business for startups who rely on accessing their customers, suppliers and/or produce through these channels. 
We require transparency and accountability at all levels of government.

(Colombo/Apr04/2022)

ECONOMYNEXT – Sri Lanka police on Sunday said a person died near President Gotabya Rajapaksa’s residences is believed to be intoxicated while he fell from a high-voltage power line with a transformer.

Sources close to the area, however, have said the person had climbed a power post in the area to protest against the power cuts and fell down before taken to hospital.

The Police Spokesman Nihal Thalduwa said the man died on admission to Kalubowila hospital after falling from a high-voltage power line with a transformer,

“The 53 years old male has been identified as…..an electrician by profession. The police suspect the person had been intoxicated during the incident,” Thalduwa said on Sunday.

The death comes as people deified President Gotabaya Rajapaksa’s curfew order under an Emergency Law and came for street protests in several parts of the country on Sunday amid social media ban, demanding the president to step down after his failure to address the economic crisis.

People started street protest after the current government failed to ensure the supply of essentials including cooking gas, fuel, and milk powder due to severe shortage of dollars, which also has led to extended power cuts as long as 13 ours in a day.

On Thursday, hundreds of protesters attempted to breach the barricade to enter President’s private house in the same area on Thursday before police used tear gas and water cannons to disperse the crowd.

Thalduwa said the body is in Kalubowila hospital mortuary and further investigations are being carried out by the Mirihana Police. (Colombo/ April 03/2022)

ECONOMYNEXT – Sri Lanka has come under international scrutiny after President Gotabaya Rajapaksa declared emergency and imposed a 36-hour curfew to prevent island wide protest against an economic crisis triggered by money printed over two year to enforce low interest rates.

The European Union delegation in Colombo said they are concerned by the state of emergency.

“EU strongly urges Sri Lankan authorities to safeguard democratic rights of all citizens, including right to free assembly and dissent, which has to be peaceful,” EU delegations said in its official twitter.com feed.

The EU has been pressing the island nation to repeal a tough and decades-old anti-terrorism laws which the government has used to suppress the dissents and minorities.

The EU’s demand has led to some amendments in Sri Lanka’s Prevention of Terrorism Act (PTA) which was earlier used to detain anybody without access to legal counsel for months.

Repealing the PTA has been one of the conditions the EU has put forward to renew its annually over 500 million US dollar worth GSP plus trade concession.

The emergency on Friday, a curfew on Sunday until Monday and a ban on gatherings came ahead of a planned nation wide protests by social media activists.

On Thursday protest left scores injured after police used tear gas and water cannons to prevent the protesters entering Rajapaksa’s private house in Colombo suburb.

The police arrested 53 people over alleged act of damaging public properties. However, strong support from lawyers helped to see 47 people being granted bail on Friday.

Julie Chung, the United Stated Ambassador for Colombo stated that Sri Lankans have a right to protest peacefully which is essential for democratic expression.

“I am watching the situation closely, and hope the coming days bring restraint from all sides, as well as much needed economic stability and relief for those suffering,” she said after the Rajapaksa declared emergency late on Friday.

Rajapaksa before contesting the presidential poll in November 2019 was a US citizen while his family still holds US citizenship.

His brother and Finance Minister Basil Rajapaksa and his family are also US citizens which has caused some public anger on Rajapaksas.

People Disregard Curfew 

Despite the curfew and over 600 arrested for breaching curfew laws, people staged isolated protests in some area with some demanded for food as they had no cooking gas and no shops are opened due to curfew.

Some people put up black flags at their houses and street to express their displeasure to the government.

Emergency Brings People to Road 

Holger Seubert, German Ambassador to Sri Lanka said people demonstrating for their rights “are no emergency”.

“It’s the emergency that brings them to the streets,” he tweeted. 

Hanaa Singer-Hamdy, the Resident Coordinator for the United Nations said the global body is monitoring the developments and “concerned by reports of violence in Sri Lanka” while called for restraint from all groups.

The island nation is under strict scrutiny of the UN Human Rights Council already for its past human rights violations.

The UN rights chief has already started evidence gathering on the past rights abuses despite strong objection from President Rajapaksa’s government.

Sarah Hulton, the British High Commissioner to Colombo said she was concerned by reports of the use of force against journalists and protesters, and the Emergency Laws.

“A citizen’s right to protest peacefully is an essential part of democracy,” she said. (Colombo/April 3/2022) 

ECONONYNEXT – More than 300 lawyers appeared on behalf of the 53 people to ensure the rule of law, a senior lawyer said on Saturday, a day after a court granted bail for police-detained suspects following a violent protest near President Gotabaya Rajapaksa’s Mirihana private residence.

Police used tear gas and water cannons late on Thursday to disperse hundreds of protesters who tried to enter Rajapaksa’s residence after a silent protest turned violent.

Except six, all other arrested people were granted bail after police failed to present any strong evidence that the arrested people were involved in damaging public properties. The six under arrest will be produced in an identification parade.

“This is a victory for lawyers,” senior lawyer Saadi Wadood, who appeared on behalf of arrested people, told Economy Next.

“Large number of lawyers voluntarily came forward to ensure the right of the people to express their displeasure is safeguarded.”

Most lawyers stayed most of the Friday at Mirihana police, they called for help from other seniors, ensured all the arrested people were produced in the court and then appeared on behalf of them.

The lawyers included Saliya Pieris, the president of the Bar Association of Sri Lanka, some of the senior civil and criminal lawyers, and their juniors.

All the lawyers first presented to Mirihana police station where the most detained were kept, applauded their braveness by clapping when the arrested people were taken by the police to bus which took them to Nugegoda Magistrate court before gathering in the court.

“All the lawyers came forward because we thought we have a moral duty to make sure the rule of law prevailed,” Wadood said,

“This is the first time we have seen lawyers voluntarily coming together after former Chief Justice Shirani Bandaranayake was removed in 2013,” Wadood said.

Bandaranayake was impeached by the parliament when she opposed a poverty alleviation bill by current finance minister Basil Rajapaksa when his brother and current prime minister Mahinda Rajapaksa was the president.

Bandaranayake was later reinstated in 2015 under a new government before she retired.

Thursday’s protest came amid continuous suffering by the public who were forced to go from pillar to post to find cooking gas, fuel, and milk powder while the power cut duration was extended to a record 13 hours on that day.

The mismanagement of economic policies have resulted in severe dollar shortage and that has resulted in lack of import of essential goods and fuel.

Wadood, however, said protesters also have a duty to make sure they do not resort to any violence.

“People have the fundamental rights to express their displeasure without crossing the limit. If somebody within the group or a third party is trying to create violence. It’s their duty to prevent such violence.”

The protesters had been demanding Rajapaksa to step down citing he has failed to address the ongoing economic crisis amid queues for fuel and cooking gas as well as nearly half a day power cut on a daily basis. (Colombo/April 2/2022)