Sri Lanka central bank holds rate to support economic recovery
COLOMBO - Sri Lanka's central bank kept its key policy rate unchanged for a second consecutive meeting on Wednesday to underpin the island nation's economic recovery from its worst financial crisis in decades.
The overnight policy rate, introduced in November, was held steady at 8% - in line with a majority of economists polled by Reuters. "The Board remains confident that the prevailing monetary policy stance will ensure that inflation will move towards the target of 5% while supporting the growth of the domestic economy," the central bank said in its statement.
The South Asian nation posted a better-than-expected 5% gross domestic product growth in 2024, signalling a turning point for an economy that plunged to its worst financial crisis in decades three years ago.
Sri Lanka's consumer price index contracted 4.2% year-on-year in February, largely driven down by a reduction in household power tariffs by 20% at the start of the year. The nation suffered record inflation during the 2022 economic meltdown that was triggered by a precipitous fall in dollar reserves.
Inflation is expected to reach positive territory by the middle of 2025 and track closer to the central bank's target of 5%, the bank's statement added.
"If Inflation falls below target by mid-year there is a likelihood that CBSL will cut rates," said Udeeshan Jonas, strategy head at Colombo-based equity research firm CAL.
"Given the possibility of global commodity prices remaining low and concerns about a global trade slowdown there is a likelihood that inflation can trend lower than the target."
Sri Lanka's economy has made a "remarkable" recovery from the crisis, the IMF said earlier this month, while approving a fourth tranche of $334 million under the $2.9 billion programme.
The central bank expects growth to be above 3% in 2025 due to the higher year-ago base effect and as the economy navigates global headwinds. (Reporting by Uditha Jayasinghe, editing by Swati Bhat and Shri Navaratnam)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Post
15 hours ago
- Arabian Post
PumpFun's Revenue Redistribution Plan Sparks Debate Amid $4bn Valuation
PumpFun, a Solana-based memecoin launchpad, has announced plans to distribute protocol revenue to $PUMP token holders through a buyback mechanism. This move marks a significant shift from the typical speculative nature of memecoins, aiming to provide tangible value to its community. However, the platform's ambitious $4 billion valuation and a targeted $1 billion raise have raised questions about the feasibility and sustainability of its revenue model. Since its inception in January 2024, PumpFun has facilitated the creation of over 6 million memecoins, positioning itself as a central player in the Solana ecosystem's resurgence following the FTX collapse. The platform's user-friendly interface allows individuals to launch tokens with minimal effort, contributing to a surge in activity that saw Solana's Total Value Locked surpass $5 billion by mid-2025. The proposed buyback strategy involves using a portion of the platform's revenue to repurchase $PUMP tokens from the open market, thereby reducing supply and potentially increasing token value. This approach is intended to reward long-term holders and align the interests of the community with the platform's growth. However, the lack of clarity regarding the specific revenue streams and the proportion allocated for buybacks has led to skepticism among investors and analysts. ADVERTISEMENT PumpFun's revenue primarily stems from a 1% swap fee on all token trades and a 1.5 SOL fee when a token 'graduates' by reaching a market cap of $90,000. While these mechanisms have generated substantial income—estimated at over $380 million—the sustainability of such revenue in the volatile memecoin market remains uncertain. The platform's reliance on continuous user engagement and token creation raises concerns about the long-term viability of its financial model. The announcement of the $1 billion raise at a $4 billion valuation has further intensified scrutiny. Critics argue that the valuation may be inflated, given the speculative nature of the memecoin market and the platform's nascent stage. Comparisons have been drawn to other DeFi projects that have faced challenges in maintaining high valuations without robust and diversified revenue streams. Community members have expressed mixed reactions to the buyback plan. Some view it as a positive step towards creating a more sustainable and value-driven ecosystem, while others question the timing and transparency of the initiative. The absence of detailed information about the buyback schedule, funding sources, and governance mechanisms has fueled debates about the platform's commitment to accountability and investor protection. PumpFun's leadership, including founders Noah Tweedale, Alon Cohen, and Dylan Kerler, has yet to provide comprehensive details addressing these concerns. The platform's history of rapid growth and controversial features, such as the now-suspended livestreaming service that allowed for unmoderated content, adds to the apprehension surrounding its governance and operational practices. The broader context of the DeFi and memecoin markets also plays a role in shaping perceptions of PumpFun's strategy. The memecoin sector has experienced explosive growth, with market capitalizations reaching unprecedented levels. However, this growth has often been accompanied by high volatility, regulatory scrutiny, and instances of market manipulation, leading to caution among institutional investors and regulators.
Gulf Today
16 hours ago
- Gulf Today
How badly could Donald Trump hurt Elon Musk?
Io Dodds, The Independent Even for Elon Musk, this is — to use the precise technical term — bonkers. Barely one week after leaving the Trump administration with every semblance of amity, the world's richest person is going scorched earth against the leader of the world's richest nation. Insults and threats. Calls for impeachment. Sinister references to Jeffrey Epstein. Somehow, Kanye West is also involved. It's like the messiest online influencer drama you've ever seen, except the parties are two of the most powerful people on Earth. But when it comes down to brass tacks, what exactly does Musk stand to lose in this titanic celebrity divorce? If Trump were to follow through on all his threats, and use every available weapon against Musk's business empire, how badly could it hurt him? The short answer is: pretty badly. In fact, with some admittedly quick and dirty math, we can put a price tag on some of it. SpaceX and the $68bn black hole. Elon Musk's estimated $388bn fortune — already $26.6bn smaller than it was before this frank exchange of thermonuclear warheads — depends on the success of two companies which are both intertwined with the US political system. One is Tesla, which makes electric vehicles; the other is SpaceX, which builds rockets, spacecraft, and satellites. X, formerly Twitter, can be left aside for now; having bought the social network 2022 for $44bn, Musk is still struggling to recoup his investment and has almost certainly lost money overall. Let's start with Space Exploration Technologies Corp., aka SpaceX. Not many people can afford to rent a rocket, so a lot of its business comes from government contracts, and U.S. government contracts most of all. As of writing, according to federal data, the Texas-based company has been paid or promised just under $21bn by Uncle Sam since 2008. The total potential value of all SpaceX's existing contracts, however, is much higher: $89.2bn. If Trump cancelled every contract tomorrow, that would mean a theoretical maximum of $68bn in lost potential income. For context, that's more than four times SpaceX's entire forecasted revenue for 2025, and nearly 15 times its revenue from 2022. Of course, there's no way to know if those maximum payments would ever actually have been made. So we could also get a rough sense of what SpaceX stands to lose by looking at the actual cash it received from federal coffers every year. In 2022 that was $2.8bn; in 2023, $3.1bn; and in 2024, $3.8bn. On the plus side for Musk, the US government is so dependent on SpaceX that some critics have called it a monopoly in the making. SpaceX ferries our astronauts to and from the International Space Station, is heavily involved in Nasa's moon landing program, and manages an increasing share of government satellite communications as well. Still, that does not guarantee safety. Would you really, in all soberness, bet against Donald Trump doing something that hurts the country merely to punish his personal enemies? In fact, as Talking Points Memo editor-in-chief Josh Marshall argues, SpaceX's critical role might actually put it in greater danger, because it leaves the feds with few options except "expropriation or nationalisation". Tesla in regulators' crosshairs?Like SpaceX, Tesla has benefited greatly from taxpayer money, mostly in the form of emission trading payments from non-electric carmakers and tax credits or consumers buying electric vehicles. An analysis by The Washington Post put Tesla's total income from emission credits since 2007 at $11.4bn as of this February. Its gain from tax credits, which allow more people to buy its cars at higher prices, has been estimated at $3.4bn. Those emission credit schemes are run by US states, not by the federal government. Nevertheless, Trump and the Republican Party have tried to undermine such schemes by contesting states' ability to set their own emissions rules. The wider impact is difficult to calculate. In contrast to SpaceX, Tesla sells to ordinary people, who tend to have their own opinions independent of government. In reputational terms, splitting noisily with Trump could reverse some of its recent sales losses; on the other hand, it might just make Tesla hated on both sides of politics. The biggest risk may be regulatory. At the time of Trump's second inauguration, Tesla was being investigated by numerous federal agencies including the Justice Department, the National Labor Relations Board, and the National Highway Traffic Safety Administration — which by itself had six pending probes. During his time at DOGE, Democrats feared Musk could use his power to influence or cancel these cases. But Trump's unabashed willingness to wield state power to punish those who displease him while rewarding loyalists cuts both ways. Live by the chainsaw, die by the chainsaw. How much that costs Tesla would depend on how far Trump is willing to go, and on the outcome of any ensuing court battle. But when U.S. stock exchanges closed on Thursday its share price had crashed by nearly 12 percent, wiping $122bn off its market value. Potential deportation — or worseSo far we've only addressed Elon Musk's finances. Yet there are other, more personal ways that Trump could hurt him if the former reality TV star truly isn't here to make friends. For example, Trump's old advisor Stephen Bannon — who has previously branded Musk a "parasitic illegal immigrant" — urged the administration to investigate Musk's immigration history, and potentially deport him. Unlike some of the feverish allegations that emanate from the extended Trump-o-sphere, this one actually has some substance. An investigation by The Washington Post last year alleged that Musk had worked illegally in the US while launching his Silicon Valley career in the mid-90s. Musk has denied this, and in any case he has been a US citizen since 2002. Still, legal experts have said his citizenship could technically be revoked if he were proven to have lied to immigration authorities. And while those laws have only rarely been enforced in the past 25 years, some Trump aides and allies have said they want that to change. Nor is that anywhere close to the only alleged skeleton in Musk's closet. What is his relationship with ecstasy, Adderall, ketamine, or magic mushrooms? Has he ever been in regular contact with Vladimir Putin? Did his colleagues at DOGE rigorously follow information security laws when extracting sensitive data from federal systems? What happened to all that data after it was obtained? At least we can probably can rule out plain old assassination by government special forces. Although, to be fair, that is literally something that Trump and his lawyers have argued should be protected by presidential immunity.
Al Etihad
19 hours ago
- Al Etihad
Trump says he has no plans to speak to Musk as feud persists
7 June 2025 17:15 WASHINGTON (Reuters)US President Donald Trump said on Friday that he has no plans to speak with Elon Musk, signaling the president and his former ally might not resolve their feud over a sweeping tax-cut bill any time reporters aboard Air Force One, Trump said he wasn't "thinking about" the Tesla CEO."I hope he does well with Tesla," Trump Trump said a review of Musk's extensive contracts with the federal government was in order. "We'll take look at everything," the president said. "It's a lot of money."Trump may get rid of the red Tesla Model S that he bought in March after showcasing Musk's electric cars on the White House lawn, a White House official said, speaking on condition of for his part, did not directly address Trump but kept up his criticism of the massive Republican tax and spending bill that contains much of Trump's domestic his social-media platform X, Musk amplified remarks made by others that Trump's "big beautiful bill" would hurt Republicans politically and add to the nation's $36.2 trillion debt. He replied "exactly" to a post by another X user that said Musk had criticized Congress and Trump had responded by criticizing Musk also declared it was time for a new political party in the United States "to represent the 80% in the middle!"People who have spoken to Musk said his anger has begun to recede and they think he will want to repair his relationship with Trump, according to one person who has spoken to Musk's White House statements came one day after the two men battled openly in an extraordinary display of hostilities that marked a stark end to a close stock rose on Friday, clawing back some losses from Thursday's session, when it dropped 14% and lost $150 billion in value, the largest single-day decline in the company's the world's richest man, bankrolled a large part of Trump's 2024 presidential campaign. Trump named Musk to head a controversial effort to downsize the federal workforce and slash feted Musk at the White House a week ago as he wrapped up his role as head of the Department of Government Efficiency. Musk cut only about half of 1% of total spending, far short of his brash plans to axe $2 trillion from the federal then, Musk has denounced Trump's tax-cut and spending bill as a "disgusting abomination." His opposition is complicating efforts to pass the bill in Congress where Republicans hold a slim bill narrowly passed the House of Representatives last month and is now before the Senate, where Republicans say they will make further analysts say the measure would add $2.4 trillion in debt over 10 Speaker Mike Johnson said he has been texting with Musk and hopes the dispute is resolved quickly. 'VERY DISAPPOINTED'Trump had initially stayed quiet while Musk campaigned to torpedo the bill, but broke his silence on Thursday, telling reporters he was "very disappointed" in Musk. Trump suggested he would terminate government contracts with Musk's businesses, which include rocket company SpaceX and its satellite unit Starlink. The billionaire then threatened to decommission SpaceX's Dragon spacecraft, the only US spacecraft capable of sending astronauts to the International Space Station. Musk later backed off that threat.
