Sri Lanka: Remittances rise 13% to $6.8 billion

Updated 21 March 2014
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Sri Lanka: Remittances rise 13% to $6.8 billion

COLOMBO: Sri Lanka’s economy grew a weaker-than-expected 7.3 percent last year, the country’s central bank said as it kept interest rates at multi-year lows as it looks to boost private investment and lending.
Sri Lankans employed abroad sent home $6.8 billion over the year, up 13 percent from 2012 while earnings from tourism jumped 35 percent to $1.4 billion in 2013, according to official figures.
The Central Bank of Sri Lanka said last year’s expansion was much stronger than the 6.3 percent recorded in 2012 thanks to a pick-up in exports and foreign remittances.
However, the figure was below the bank’s 8.0 percent forecast as an expected rise in lending had not taken place.
“Credit to the private sector by commercial banks moderated, growing only by 5.2 percent in January 2014 in comparison to 7.5 percent in December 2013,” the bank said in its monthly review of the economy.
Officials said the softer data came as loans to the private sector rose just 15.5 percent last year, well short of estimates of 18 percent.
But the bank said its Monetary Board viewed the deceleration in those loans to be “temporary.”
It added: “Private sector credit is likely to rebound from the second quarter of (2014), supported by declining market lending rates, sufficient liquidity levels and increased demand for exports from the advanced economies.”
The bank kept rates on hold Friday after cutting them by 50 basis points to 8.0 percent in January — the lowest since it began publishing them in 1999 — as it looks to boost private-sector lending.
In January the the bank said record remittances and tourism earnings helped wipe out a trade deficit in 2013 and improve foreign reserves in a country relying heavily on external debt.
Official figures showed Sri Lanka’s overall balance of payments ended up with a surplus of $991 million, compared with a modest surplus of $151 million in 2012 and a deficit of $1.06 billion in 2011.
The improvement in the balance of payments was also helped by garment exports which increased by 26 percent while the island’s main export commodities of tea and coconut also increased significantly.
The IMF had warned Sri Lanka late last year against rate cuts and forecast 2013 growth at 6.5 percent.
Sri Lanka’s economy recorded 8.0 percent-plus growth for two straight years after troops crushed separatist Tamil Tiger rebels in 2009, but the pace has slowed in the last two years.


AirAsia lifts order of Airbus planes to 100 long-haul jets

Updated 19 July 2018
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AirAsia lifts order of Airbus planes to 100 long-haul jets

  • The A330neos will be operated by AirAsia X out of its bases in Malaysia, Thailand and Indonesia
  • AirAsia will finance the A330neos through cashflow, debt capital and sale-and-leaseback arrangements

KUALA LUMPUR: Malaysia’s AirAsia yesterday said it would expand an order for A330neo passenger jets, adding 34 aircraft to an existing order to bring the total to 100 long-haul wide-body jets worth $30 billion at list prices.
The budget carrier’s AirAsia X Bhd long-haul unit announced the deal, which includes a long-awaited confirmation of an order for 66 planes, at the Farnborough Airshow.
It follows a fierce contest between Airbus and Boeing after AirAsia threatened to defect to the Boeing 787 model.
“We got close with Boeing,” AirAsia CEO Tony Fernandes told reporters in Kuala Lumpur.
“They ran a good campaign. It was a close fight. They should be applauded as well. Until a week ago I wouldn’t have really known which way we were swinging.”
Deliveries of the A330neos are scheduled to start in the second half of 2019. They will be operated by AirAsia X out of its bases in Malaysia, Thailand and Indonesia and aid the airline’s growth.
AirAsia X is Airbus’ biggest customer for the A330neo and a longer-range version of the widebody to be delivered from 2021 would allow it to return to the Kuala Lumpur-London route it dropped in 2012 due to low demand and high fuel prices.
“We now can start London,” Fernandes said. “(But) I didn’t say we are going to start.”
AirAsia X had a firm order for 66 of the fuel-efficient A330neo widebody jets to replace its older first-generation A330s but it has been pushing back the delivery dates.
The airline also has a firm order for 10 A350-900s placed in 2009, but Fernandes in April said that jet was “too expensive” and would not be purchased.
“I don’t think we’ll be taking any 350-900s,” he said on Thursday, adding the orders would probably be converted to A330neos but he was not sure if that had been done yet. “We will be pretty focused on the 330neos.”
Airlines typically receive large discounts from list prices, but the A350 has a higher list price than the A330neo.
AirAsia will finance the A330neos through cashflow, debt capital and sale-and-leaseback arrangements, Fernandes said.
Industry sources said Airbus tried to add 100 narrowbody A321neos to the deal but was not able to secure the airline’s agreement.
When asked about a single-aisle deal on Thursday, Fernandes said: “We are still looking to buy more planes.”
AirAsia also signed a deal with Airbus to explore the development of an industrial aeronautical center in Malaysia over the next 18 months, with options including the establishment of maintenance, repair and overhaul facilities, a training center and a data center.