Business
Lanka imports oil without letters of credit
ECONOMYNEXT – Sri Lanka has been importing oil for many months without letters of credit helped by long term relationships, Chairman of state-run Ceylon Petroleum Corporation Sumith Wijesinghe has said, after banks failed honor trade documents due to money printed to keep interest rates low.
Any supplier who sends a shipment without an LC risks non-payment or rejection of a consignment.
While most small shipments take place on open papers shippers usually do not load high value cargo without a letter of credit.
A shipment of oil may cost anything from 40 million to 55 million dollars.
“We have suppliers who have worked with us for years,” CPC Chairman Wijesinghe told reporters in Colombo.
“There is an understanding that the ordered stocks will be purchased. When we order they have to buy it from the producer. If the CPC did not buy it, the supplier has to remove it from that point. Due to relationship we have they load the ship.”
Sometimes tankers wait for two weeks or more off Colombo Port waiting for letter of credit to be opened.
“Even if the LC was delayed they brought the ship,” Wijesinghe said. “Up to now we have not failed to open LC. So we still have that understanding with the suppliers.”
Sri Lanka ran out of foreign exchange due to an extremely unstable reserve collecting soft-peg regime called a ‘flexible’ exchange backed by discretionary ‘flexible’ inflation targeting.
Sri Lanka’s banks lost the ability to honor letters of credit around June 2021 after non-credible peg was enforced by the central bank at around 200 to the US dollar while printing money to keep policy rates low under flexible inflation targeting.
The country started facing shortages of food, fuel and medicines due to flexible inflation targeting, long before it defaulted on debt.
Foreign suppliers started asking for LC to be counter-signed from around late 2020, and in 2021 most stopped endorsing them. Indian banks were counter-signing for a time.
The third rate monetary policy framework eventually drove the country to default after three currency crises in quick succession.
The CPC also ended up with over 3 billion US dollars in debt due to restrictions placed on dollar purchases during previous crises triggered by flexible inflation targeting.
Problems state banks, partly caused by CPC dollar loans, led to progressive cuts in risk limits by foreign counterparties and country limits, long before the country officially defaulted.
On April 12 Sri Lanka would not make payment on foreign debt, because the country lost the ability to do so, even though the desire to pay was there.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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