Business Times

Sri Lanka poised to become the regional financial hub

By Bandula Sirimanna

Sri Lanka is ‘actively engaged in' the process of becoming the regional financial hub, K.G.D.D. Dheerasinghe, Deputy Governor, Central Bank told a gathering of bankers at a discussion forum; “Road-map – Monetary and Financial Sector Policy for 2011 and Beyond”, on Tuesday in Colombo.

Analysing the ‘Road map monetary and fiscal sector policies’, he said the Central Bank was strengthening its global and regional financial links. The immediate goal was to develop the financial sector's capacity to proactively respond to the changing requirements of the economy, and support the next phase of economic development of the country, he said.

Revealing that the Central Bank had invited Moody's for a fresh sovereign credit rating, he said both S&P and Moody's had given a ‘stable' outlook while Fitch had said ‘positive. These three rating agencies had given Sri Lanka a favourable foreign currency rating.

He noted that Royal Bank of Scotland, HSBC, and Bank of America have been appointed as international sovereign ratings advisors. Sovereign ratings committee will meet in March this year to upgrade the ratings, he said.

All key sectors of the economy performed impressively in 2010. Inflation had remained manageable at ‘mid-single digit levels' for two consecutive years, stability in exchange rate was maintained and there had been ‘remarkable macro economic stability.’ The Central Bank has projected the country’s economy to grow by 8-9 % over the next few years and has asserted that all sectors would contribute to the growth, riding on the ‘peace dividend.' he added. Dr Dheerasinghe also said the rupee would appreciate against the dollar this year, but not at the expense of exchange rate stability.

Malik Cader, Director General, Securities and Exchange Commission of Sri Lanka said that the Colombo Stock Market showed an overall growth of 96 % last year while it was 125 % in 2009. With the current market capitalization capped at Rs.2.2 trillion, the government is focusing to increase the entities listed on the CSE via Initial Public Offers. Market capitalization is expected to increase at least by 20 % per annum from this year onwards. He said the market capital will increase to Rs 3 trillion during this year adding that 50 to 60 new companies will be listed on the CSE during the year and of these around 25 will be finance companies as directed by the Central Bank.

Nalaka Godahewa, Chairman - Sri Lanka Tourism pointed out that his intention is to make tourism as the trend-setter of the country’s economy while achieving the revenue target of Rs.3 billion in 2016. "Sri Lanka Tourism is not only concentrating on increasing the influx of tourists to the island but also wants the local community to be empowered through the industry," he said .

To achieve this objective the Sri Lanka Tourist Board will be launching a 'home stay and bungalows' program as tourist arrivals rose 46 % last year after the end of a 30-year war and industry infrastructure needs time to catch up, he revealed.

Sri Lanka has around 15,270 hotel rooms which is able to cater to around 650,000 – 700,000 tourists. In 2010 tourist arrivals were 654,000 and 750,000 arrivals are expected this year, he said.

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