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.


OPEC, Russia rebuff Trump’s call for immediate boost to oil output

Updated 23 September 2018
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OPEC, Russia rebuff Trump’s call for immediate boost to oil output

ALGIERS: OPEC’s leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, ruled out on Sunday any immediate, additional increase in crude output, effectively rebuffing US President Donald Trump’s calls for action to cool the market.
“I do not influence prices,” Saudi Energy Minister Khalid Al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.
Benchmark Brent oil reached $80 a barrel this month, prompting Trump to reiterate on Thursday his demand that the Organization of the Petroleum Exporting Countries lower prices.
The price rally mainly stemmed from a decline in oil exports from OPEC member Iran due to fresh US sanctions.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!” Trump wrote on Twitter.
Falih said Saudi Arabia had spare capacity to increase oil output but no such move was needed at the moment.
“My information is that the markets are adequately supplied. I don’t know of any refiner in the world who is looking for oil and is not able to get it,” Falih said.
However, he signalled Saudi Arabia stood ready to increase supply if Iran’s output fell: “Whatever takes place between now and the end of the year in terms of supply changes will be addressed.”
Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as US sanctions on Iran were creating new challenges for oil markets.
Oman’s Oil Minister Mohammed bin Hamad Al-Rumhy and Kuwaiti counterpart Bakhit Al-Rashidi told reporters after Sunday’s talks that producers had agreed they needed to focus on reaching 100 percent compliance with production cuts agreed in June.
That effectively means compensating for falling Iranian production. Al-Rumhy said the exact mechanism for doing so had not been discussed.
The statement from Trump, meanwhile, was not his first criticism of OPEC.
Higher gasoline prices for US consumers could create a political headache for Republican Trump before mid-term congressional elections in November.
Iran, OPEC’s third-largest producer, has accused Trump of orchestrating the oil price rally by imposing sanctions on Tehran and accused its regional arch-rival Saudi Arabia of bowing to US pressure.
On Sunday, Iranian Oil Minister Bijan Zanganeh said Trump’s tweet “was the biggest insult to Washington’s allies in the Middle East.”
OPEC OUTPUT FALLS AGAIN
Seeking to reverse a downturn in oil prices that began in 2014, OPEC, Russia and other allies decided in late 2016 to reduce supply by some 1.8 million barrels per day (bpd).
In June this year, however, after months of cutting by more than their pact had called for, largely due to involuntary reductions from Venezuela and other producers, they agreed to boost output by returning to 100 percent compliance.
That equates to an increase of about 1 million bpd, but latest data show they are some way from achieving that target.
In August, OPEC and its allies cut production by 600,000 bpd more than their pact required, mainly as a result of falling output in Iran as customers in Europe and Asia reduced purchases ahead of the US sanctions deadline.
Iran told OPEC its production had been steady in August at 3.8 million bpd. OPEC’s own estimates, according to its secondary sources such as researchers and ship-trackers, put Iranian output at 3.58 million bpd.
Falih said returning to 100 percent compliance was the main objective and should be achieved in the next two-three months.
Although he refrained from specifying how that could be done, Saudi Arabia is the only oil producer with significant spare capacity.
“We have the consensus that we need to offset reductions and achieve 100 percent compliance, which means we can produce significantly more than we are producing today if there is demand,” Falih said.
“The biggest issue is not with the producing countries, it’s with the refiners, it’s with the demand. We in Saudi Arabia have not seen demand for any additional barrel that we did not produce.”
OPEC also decided on Sunday to adjust the dates of its next meeting to Dec. 6-7 from the earlier-agreed Dec. 3.
The joint OPEC/non-OPEC ministerial monitoring committee will next meet on Nov. 11 in Abu Dhabi.