Annual Average Inflation reaches the lowest level since 1985
The annual average inflation rate, as measured by the Colombo Consumers’ Price Index (CCPI) (2002=100), computed by the Department of Census and Statistics, decelerated steadily to 3.4 per cent in 2009 from 22.6 per cent recorded in 2008. This is the lowest annual average (end year) inflation rate recorded since 1985. The point-to-point inflation reached 4.8 per cent in December, 2009 compared to 14.4 per cent recorded
in December last year.
Maintaining a low inflation rate generates numerous economic and social benefits. It encourages savings and investment, stimulates capital flows from non-productive investment to productive investment, thereby promoting economic growth and generating employment opportunities.
Moreover, low inflation prevents the formation of adverse expectations, and the resulting stability supports investors, consumers, planners and policy makers to make effective decisions. Low inflation also protects most vulnerable groups, such as fixed income earners, pensioners and low income groups as high inflation would erode their real income rapidly.
Sri Lanka cuts lending rate for farmers ahead of polls
Dec 30, 2009 (LBO) – Sri Lanka’s Central Bank said it will slash lending rates for farmers with effect from January 1, 2010 barely a month ahead of crucial presidential elections.
The interest rates on three types of loans mainly for cultivation and animal husbandry will be reduced by four percentage points to eight percent from 12 percent, the bank said in a statement.
The move follows price cuts in petrol Tuesday and in several other essential commodities like sugar ahead of the presidential poll on January 26.
The three agricultural credit schemes are the New Comprehensive Rural Credit Scheme (NCRCS), Agro Livestock Development Loan Scheme (ALDL) and Krushi Navodaya Special Loan Scheme.
The NCRCS loan scheme caters to 34 field crops including paddy and is provided to farmers for cultivation purposes, the bank said.
The scheme is also extended to buyers of these agricultural commodities, who have signed forward sale agreements with the farmers.
The interest rate on purchasing loans under forward sales agreement will be cut to 10 percent from 12 percent.
Total loans amounting to about 10 billion rupees are disbursed each year under this loan scheme.
Under the Agro Livestock Development Loan Scheme the interest rate on loans for setting up milk processing factories and agro-based processing industries will be reduced to 12 percent from 14 percent.
The ALDL scheme, which was introduced under the government’s 2008 budget to increase liquid milk production in the country, disbursed 500 million rupees in 2009.
“A large number of dairy farmers have shown keen interest to register under this loan scheme,” the Central Bank said.
The Krushi Navodaya Loan Scheme caters to the medium term loan requirements of the farmer community for agriculture and animal husbandry.
The statement said the government’s aim in reducing interest rates on loans is to encourage new investment in agricultural and animal husbandry projects.
“This will enable an increase in the volume in agricultural produce and liquid milk and other livestock products,” it said.
“This in effect will serve the government’s objective of achieving country’s food security and uplifting the livelihood and the income levels of farmer community.”
Sri Lanka port expands ship fuel facilities
Jan 01, 2010, (LBO) – The Sri Lanka Ports Authority (SLPA) said it has expanded facilities for bunkering or ship fuel at Colombo port with the addition of another berth for oil tankers that will reduce delays.
Colombo Port’s New North Pier, which has been developed as a multi-purpose berth, handled its first oil tanker on December 30, 2009 with a call by the vessel ‘MT Haven’, an SLPA statement said
A new oil pump pipe line system has been built connecting the pier with other facilities for oil transportation.
“With this latest project, extra berthing facilities will be provided for the oil tankers reaching Colombo for bunkering purposes,” it said.
The shortage of berths for tankers has been a critical issue the shipping community had been complaining about and had held back the expansion of the ship fuel market.
The extra berth will reduce delays in loading and unloading oil tankers, and eventually reduce costs.
The SLPA said it hopes the new facilities will boost bunkering business at Colombo port and improve foreign exchange earnings.
It said it was building two new oil storage tanks at the Colombo port ‘oil bank’ to boost capacity in order to improve bunkering facilities at the port.