Deterioration in both manufacturing and services activities on a month-on-month basis

In April 2023, Purchasing Managers’ Indices (PMI) for Manufacturing and Services activities recorded index values of 34.7 and 49.6, respectively, indicating deterioration in both Manufacturing and Services activities, on a month-on-month basis, according to Weekly Economic Indicators of the Central Bank of Sri Lanka.

The report further said:

During the 1 st quarter of 2023, both tea and rubber production recorded contractions, on year-on-year, which can be largely attributable to the lag effect of shortages of required fertiliser. Coconut production also recorded a decline reflecting the lag effects of dry weather conditions that prevailed during the corresponding quarter of 2022.During the period under review (13.05.2023 to 19.05.2023), crude oil prices showed a mixed performance.

Supply concerns amidst wildfires in Canada and the optimism over oil demand supported the price increases during the week, while the strengthening of the US dollar resulted in oil price declining towards the end of the week. Overall, both Brent and WTI prices increased by around US dollars 1.81 per barrel and US dollars 1.90 per barrel, respectively, during the review period.Weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 19th May 2023 decreased by 98 bps to 20.34 per cent compared to the previous week.

The reserve money decreased compared to the previous week mainly due to the decrease in the deposits held by the commercial banks with the Central Bank and decrease in currency in circulation.The total outstanding market liquidity was a deficit of Rs. 2.444 bn by 19th May 2023, compared to a deficit of Rs. 57.593 bn by the end of last week.

By 19th May 2023, the All Share Price Index (ASPI) decreased by 2.36 per cent to 8,716.96 points and the S&P SL 20 Index decreased by 4.23 per cent to 2,478.40 points, compared to the index values of last week.

During the year up to 19th May 2023, the Sri Lankan rupee appreciated against the US dollar by 18.7 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee appreciated against the Japanese yen by 24.1 per cent, the pound sterling by 15.4 per cent, the Euro by 17.5 per cent and the Indian rupee by 18.7 per cent during this period.