Latest news with #UdithaJayasinghe
Yahoo
05-04-2025
- Business
- Yahoo
India, UAE to develop Sri Lanka energy hub as Delhi competes with China for influence
By Uditha Jayasinghe and Shivam Patel COLOMBO/NEW DELHI (Reuters) - India and the United Arab Emirates agreed to develop an energy hub in Sri Lanka, India's foreign ministry said on Saturday, as New Delhi's competition with China grows in the Indian Ocean island nation. The three nations signed the pact for the hub during Indian Prime Minister Narendra Modi's visit to Sri Lanka, the first by a global leader since Sri Lankan President Anura Kumara Dissanayake took office in September. New Delhi and Colombo have worked to deepen ties as India's southern neighbour recovers from a severe financial crisis triggered in 2022, during which India provided $4 billion in financial assistance. Saturday's agreement boosts New Delhi's competition with China, whose state energy firm Sinopec ( has signed a deal to build a $3.2-billion oil refinery in Sri Lanka's southern port city of Hambantota. The energy hub in the strategically important city of Trincomalee, a natural harbour in the Sri Lanka's east, will involve construction of a multi-product pipeline and may include using a World War Two tank farm partly held by the Sri Lankan subsidiary of Indian Oil Corp, Indian Foreign Secretary Vikram Misri told reporters in Colombo. "The UAE is a strategic partner for India in the energy space and therefore was an ideal partner for this exercise that is being done for the first time in the region," Misri said. "The exact contours of UAE's role will be elaborated once the business to business discussions kick off." The three nations will next choose business entities that will consider the financing and feasibility of projects for the hub, he said. Modi also inaugurated a $100 million solar power project, a joint venture between Ceylon Electricity Board and India's National Thermal Power Corp. India and Sri Lanka also concluded their debt restructuring process, Foreign Secretary Misri said. Sri Lanka owes about $1.36 billion in loans to EXIM Bank of India and State Bank of India, according to Sri Lanka Finance Ministry data. Colombo kicked off debt restructuring talks after it defaulted on its debt in May 2022, signing a preliminary deal with bilateral creditors Japan, India and China last June. India and Sri Lanka also signed pacts on power grid connectivity, digitalisation, security and healthcare.
Zawya
26-03-2025
- Business
- Zawya
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)
