Economy to take a hit from global developments

The impact of global developments, such as Brexit, recent Presidential elections in the United States (US) as well as interest rate hikes by the US Federal Reserve, the forthcoming elections in France and Germany in Europe, the projected slowdown in the Chinese economy, as well as economic conditions in Sri Lanka’s major trading partners, including India, Japan, Russia and the Middle East, will have asignificant influence on the domestic economy, the Central Bank of Sri Lanka (CBSL) said today.Governor of the Central Bank of Sri Lanka Dr. Indrajit Coomaraswamy said that trends in oil prices and international capital flows, following the normalisation of interest rates in the US are likely to be particularly important. Accordingly, he says it is anticipated that inflation expectations would broadly remain anchored in the medium-term with appropriate demand management policies, supported by timely supply side measures. “We also expect that changes to government tax structure and supply shortages stemming from weather related developments as well as shocks that could arise due to possible reversal of global commodity prices could cause temporary variations in price levels. In particular, if current drought conditions prevail, there could be adverse implications on price levels, while impacting on economic activities, notably agriculture and power generation. As in the past, it is expected that the Government would take timely measures to counter the adverse supply side effects on prices, thus mitigating adverse inflation expectations of the general public, he said while presenting the CBSL Monetary and Financial Sector Policies for 2017 and Beyond. He also said that primary dealers play a vital role in trading of Government securities and market making. Further, there is high potential to deepen the debt securities market in the country.“Hence, we need to have a clearly stated policy framework for Primary Dealers. This will further enhance the safety of investments in the Government securities market,” he said.Accordingly, he noted that the CBSL has already revisited the existing regulatory framework of primary dealers and based on those findings, CBSL will introduce an appropriate regulatory framework for primary dealers in line with the latest developments in the market by benchmarking the global standards. CBSL also expects to establish and implement a restructuring mechanism for distressed primary dealers. (Colombo Gazette) The Central Bank has sought to preserve the soundness, efficiency and stability of the financial system primarily through the regulation and supervision of all major categories of financial institutions, ensuring sound and safe payment and settlement systems as well as establishing risk management systems and instilling good corporate governance standards and practices in the financial sector while promoting financial inclusion.“In the medium-term, our overall aim is to ensure the stability in the financial sector through identifying emerging vulnerabilities in this sector; adopting early corrective actions; and implementing a series of measures to further strengthen financial institutions, markets, infrastructure and safety nets. Our medium-term plan is to have a financial system, which offers the full range of financial products and services to all economic sectors, including agriculture, infrastructure, manufacturing, particularly small and medium enterprises (SMEs), and trade to achieve broader economic objectives of our country. We need to have a wellplanned and an ambitious agenda for financial sector development and reforms ranging across financial sector policies with a vision of innovative, robust and competitive financialsystems,” Coomaraswamy said. read more

NDP to react today to Ontario budget Wynne gives them to Thursday

by The Canadian Press Posted May 2, 2014 2:00 am MDT NDP to react today to Ontario budget; Wynne gives them to Thursday to take stand TORONTO – Premier Kathleen Wynne is giving Ontario’s New Democrats until next Thursday to decide if they’ll support the budget or try to force a June election, but we should get some indication today where they stand.NDP Leader Andrea Horwath decided to wait until today to offer any reaction to the $130 billion budget, which increased spending and the deficit amid declining revenues but hiked taxes only on higher income earners, smokers and airlines.Horwath knows the Liberals need her help to avoid being defeated because the Progressive Conservatives vowed to vote against the budget even before they saw it.But when mobbed by reporters after the budget was introduced, Horwath said only that she wanted to take more time to look at it and would react in the morning.So Wynne fired off a letter setting a May 8 deadline for Horwath to meet with the premier and say if the NDP will help pass the two budget bills before the end of June.The letter doesn’t say if Wynne would call the budget vote at that point or visit the Lieutenant Governor and ask him to dissolve the legislature and call an election.Several large labour groups, including the Unifor union and the Ontario Federation of Labour, urged the NDP to pass the budget and avoid an election.The New Democrats propped up the Liberals in the last two budgets, but negotiated major changes in each including a tax on incomes over $500,000 and a 15 per cent average cut in auto insurance premiums.Wynne says most of the contents of the budget have been known for weeks, so the NDP shouldn’t need too much time to make up their minds.“Given that much of the budget’s content has been discussed for several months and that the budget bill is in front of the house, I believe that one week is a sufficient amount of time for your to complete your review,” Wynne wrote to Horwath. AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email read more