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SLPP MP Pramitha Bandara Tennakoon has introduced a Private Member's Bill declaring the minimum age of marriage for children as 18 years.

Sri Lanka’s expectation of encouraging borrowings by lowering interest rates as a key tool to stimulate the economy during the COVID-19 crisis period has very little impact on spending and investment, several economic analysts and bankers said. Low interest rates cannot rescue Sri Lanka in the present stage of economic calamity; they simply cause the money to flow to people who have other interests in the system, eminent economic analyst and former Central Bank (CB) Deputy Governor W.A Wijewardena told the Business Times.

Economic rehabilitation requires the country to use its human, physical and knowledge capital for enhanced production, he pointed out adding that cheap money or flooding the economy with credit will not help the country to attain that goal.

As it is, the Central Bank has to go for further reduction in interest rates to discourage banks from parking their excess money amounting to about Rs. 160 billion with the CB; that will be suicidal because savers will not get enough remuneration for their efforts, he added.

In that way, more problems are being created for the economy and the current low interest rate regime should be managed properly, Mr Wijewardena said stressing that there were no further possibilities for interest rate cuts in the economy.

On the other hand, commercial banks and non-bank financial institutions have not responded promptly in passing the benefit of interest rate reductions.

Banks have equated monthly installments of borrowers, and also make it difficult to take new loans by not easing restrictions, several bank customers complained.

One-year fixed deposit rates fell to 5.5 per cent currently from 11.5 per cent in December 2019 and one-year Treasury bill rate fell to 4.8 from around 8.5 per cent

Providing a relief to borrowers, the average prime lending rate of commercial banks fell to 7.4 per cent from 9.7 per cent.

However, the lowering of interest rates has pushed three million depositors and their seven million dependants in great difficulties.

The interest rate in Sri Lanka is determined by the demand for credit, the excess of deposits and inflation, former senior banker and economic analyst S.A.P. Suriyapperuma told the Business Times.

The CB’s Monetary Board also sets interest rates with the aim of raising Sri Lanka’s savings rate, which has been a public policy for nearly 50 years.

As a result of these policies, Sri Lanka’s savings have increased to 26 per cent from 18 per cent over the past 30 years, he revealed, adding that after the loan interest rate was set between 4 and 11 per cent, the banks immediately brought down the deposit rate to 5 per cent.

Low interest loans should be made available to investors and businessmen. But the provision of refinancing facilities on state intervention should be made through funds obtained from foreign funds and innocent depositors should not be held captive for this purpose, he pointed out. (Bandula Sirimanna)

Colombo district MP and senior politician Susil Premajayantha was yesterday (26) assigned the state ministerial portfolio that was first assigned to MP Wijedasa Rajapakshe.

The Millennium Challenge Corporation’s (MCC) Sri Lankan office confirmed to The Sunday Morning the authenticity of then Attorney General (AG) Jayantha Jayasuriya’s letter in 2018, which resurfaced recently causing fresh controversy. MCC Country Director Jenner Edleman affirmed that such a letter was received by the MCC.

“The letter is legitimate but I do not want to speak further on this to the press,” Edelman told The Sunday Morning on Friday (21). The letter by the then AG appeared to be in favour of the MCC Compact being implemented in Sri Lanka.

“Having gleaned through the proposed Millennium Challenge (Corporation) Compact, the draft Programme Implementation Agreement (PIA), as well as the Points of Discussion (without prejudice) between the negotiating parties which has been made available to me, I wish at the very onset (to) opine that no existing laws of Sri Lanka’s inhibits the Compact and the PIA (from) being implemented in Sri Lanka,” the letter sent by the department said.

However, one amendment to the agreement had been requested by the former AG in the letter.

“Thus, I am of the view that the passage of the said enactment by Parliament would result in the Compact and PIA, having parity of status of a domestic law in Sri Lanka. In the context of the above, it is requisite that Section 7.1 of the Compact referring to the provisions on Entry into Force, would be revised with the deletion of the sentence pertaining to the Compact prevailing over the domestic laws of Sri Lanka.”

Meanwhile, the MCC Compact agreement is currently under consideration and awaiting the observations of several state agencies, according to the AG, Co-ordinating Secretary of the AG State Counsel Nishara Jayaratne said, responding to a query by The Sunday Morning.

“We have called for several observations from several state agencies, so until we get these observations, we are not considering the matter. It’s under consideration,” she said.

When The Sunday Morning questioned Jayaratne as to whether current AG Dappula de Livera was of the same stance as his predecessor, she responded in the negative. (The Sunday Morning)

Land value in the Colombo district has been hit by the COVID-19 pandemic making it a victim with the annual growth rate declining during the first half of this year. This has brought down the prices of residential, commercial and industrial properties, the Central Bank data showed .

The highest sum of monies in the Vote on Account (VoA) for the next four months has been allocated to the Administrative Services, Local Government and Provincial Councils Ministry, it is learnt.

Sri Lanka will be facing a tyre shortage soon as a result of the prevailing restrictions on imports imposed by the government to promote import substitution and prevent foreign exchange out flows, several tyre dealers, traders and buyers complained.

The Indian government has reiterated its position on the “full implementation” of the 13th amendment, amidst moves to introduce a new amendment.

Prime Minister Mahinda Rajapaksa yesterday (25) called on the first time parliamentarians to cast aside their personal and political agendas and support the passage of the proposed new Constitution.

Opposition parliamentarians continue to push to retain the independent commissions in the midst of government plans to abolish the 19th Amendment to the Constitution. JVP MP Vijitha Herath said that independent commissions should be retained although the 19th Amendment is to be abolished.

He observed that the 19th Amendment managed to reduce to an extent the limitless powers vested with the executive presidency.

He explained that it was the independent Elections Commission that ensured the holding of a free and fair election.

According to Herath, the independent commissions should be retained in the proposed new constitutional amendment.

Meanwhile, Chief Opposition Whip Lakshman Kiriella also noted that the independent commissions should be continued with and that the government should give a clear response on the matter.

He further noted that present members of the government had supported the 19th Amendment to the Constitution since it was passed in parliament with 223 voting in favour.

"Amendments proposed by them were also included in the 19th Amendment. Why the sudden change of heart," he questioned.

However, Co-Cabinet Spokesperson, Minister Udaya Gamanpila said that independent commissions will be retained in the proposed new constitutional amendment albeit with some changes.

President Gotabaya Rajapaksa has appointed Agriculture Minister Mahindananda Aluthgamage as his representative to the parliamentary Constitutional Council.

Minister Aluthgamage when inquired confirmed the appointment.

Sri Lanka is on the verge of uncertainty in continuing the IMF programme that would also unlock substantial multilateral and bilateral financing (possibly debt relief as well), increasing the prospects of improving the sovereign rating.