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ADB approves $200 million policy-based loan to Sri Lanka

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The Asian Development Bank (ADB) today approved a $200 million policy-based loan to further help the Government of Sri Lanka strengthen its financial sector. 

This second subprogram of ADB’s Financial Sector Stability and Reforms Program builds on the stabilization and crisis management measures put in place under the first subprogram approved in 2023.
“Sri Lanka has made good progress in stabilizing macroeconomic conditions and improving the fiscal situation. ADB is helping the country establish long-term growth by introducing and institutionalizing structural reforms in its financial sector,” said ADB Country Director for Sri Lanka Takafumi Kadono. “This subprogram reinforces ADB’s support in strengthening the governance of the banking sector and expanding financial inclusion in Sri Lanka to achieve sustainable recovery from economic crisis, resilience, and poverty alleviation.”

Policy reforms under subprogram 2 will improve the Central Bank of Sri Lanka’s (CBSL) regulatory supervision of banks to ensure financial stability. This includes an improved early warning system that will identify weakening processes of banks and introduce corrective actions. The CBSL will implement a new stress testing model to monitor solvency issues and liquidity stresses.

Subprogram 2 will continue to strengthen the banking sector’s asset quality. The CBSL will provide guidance on credit concentration risk limits and give incentives to banks to accept guarantees and limit collateral requirements to micro, small, and medium-sized enterprises (MSMEs). In addition, the Ministry of Finance, Economic Development, Policy Formulation, Planning and Tourism (MOF) will provide MSMEs, especially women-led businesses, incentive packages such as special loans to expand their business.

Financial inclusion of women and vulnerable groups will be further expanded through the digitization of personal information to enhance electronic transactions. The MOF will formulate a policy framework for women-led MSMEs to improve their access to finance, with the CBSL helping financial institutions identify eligible women entrepreneurs.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.

(adb.org)

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Norochcholai generator to shut down for 25 days

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The Ceylon Electricity Board (CEB) announced that the generator No. 01 at the Norochcholai Power Plant will be deactivated from midnight today (June 13) for scheduled maintenance lasting 25 days.

This will result in a temporary reduction of 300 megawatts from the national grid.

However, the Kelanitissa Combined Cycle Power Plant, which had been deactivated for around one and a half months for maintenance, will also be reactivated from midnight, contributing 165 megawatts back to the system.

CEB Media Spokesman – Dhammika Wimalaratne noted that the timing of the maintenance aligns with increased hydroelectric generation capacity due to current rainfall.

(Source: Aruna)

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Global oil prices soar after Israel attacks Iran

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Global oil prices jumped after Israel said it had struck Iran, in a dramatic escalation of tensions in the Middle East.

Benchmark oil contracts Brent Crude and Nymex light sweet were up by more than 10% after the news emerged.

Traders are concerned that a conflict between Iran and Israel could disrupt supplies coming from the energy-rich region.

The cost of crude oil affects everything from the price of food at the supermarket to how much it costs to fill up your car.

Analysts have told the BBC that energy traders will now be watching to see whether Iran retaliates in the coming days.

“It’s an explosive situation, albeit one that could be defused quickly as we saw in April and October last year, when Israel and Iran struck each other directly,” Vandana Hari of Vandana Insights told the BBC.

“It could also spiral out into a bigger war that disrupts Mideast oil supply,” she added.

In an extreme scenario, Iran could disrupt supplies of millions of barrels of oil a day if it targets infrastructure or shipping in the Strait of Hormuz.

The strait is one of the world’s most important shipping routes, with about a fifth of the world’s oil passing through it.

At any one time, there are several dozen tankers on their way to the Strait of Hormuz, or leaving it, as major oil and gas producers in the Middle East and their customers transport energy from the region.

Bounded to the north by Iran and to the south by Oman and the United Arab Emirates (UAE), the Strait of Hormuz connects the Gulf with the Arabian Sea.

“What we see now is very initial risk-on reaction. But over the next day or two, the market will need to factor in where this could escalate to,” Saul Kavonic, head of energy research at MST Financial said.

(BBC News)

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CID teams conduct prison inspections islandwide

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The Ministry of Public Security says that 28 Criminal Investigation Department (CID) teams have begun inspections at all prisons across the country yesterday (June 12), with the operation continuing today (June 13) due to its scale.

These inspections focus particularly on reviewing prison documents, as part of the ongoing investigation into the alleged misuse of presidential pardons to unlawfully release inmates.

Commissioner General of Prisons – Thushara Upuldeniya, who was arrested over the unauthorized release of an Anuradhapura Prison inmate on Vesak Poya Day, remains in custody at a Colombo prison under special protection.

Meanwhile, Anuradhapura Prison Superintendent – Mohan Karunaratne, who has also been remanded, is to be produced before court again today.

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