The Central Bank has temporarily shelved plans to obtain a credit rating for Sri Lanka, in the wake if the turmoil in Asian financial markets.
"We will wait for the markets to settle down," Central Bank Governor A. S. Jayewardene said. "This is not the appropriate time to go for a rating."
Originally the Central Bank was hoping to initiate the process of obtaining a sovereign rating by the end of 1997.
A sovereign rating rates the credit risk of a country. The rating serves as a ready guide to investors to arrive at a interest without having to do in depth investigations for themselves. It also serves as a benchmark to base the rates at which money will be lent to private issuers. High ratings enable borrowers to obtain funds at cheaper rates.
In the absence of a reliable rating the government last year floated a US $ 50 mn debt issue, mainly to serve as a guide for private borrowers to also go to international markets.
Another such issue which was to follow at around this has also been delayed.
Top rating agencies such as Moody's Investors Services and Standard and Poor Corp, suddenly downgraded ratings for most East Asian nations during the past few months when their financial markets collapsed and some corporates were unable to pay back foreign debt.
The rating agencies came under fire from investors for not being able to anticipate the weaknesses in these country early enough.
Rating agencies on their part have said that unlike in developed countries accurate information was not available on a timely to basis to base their decisions.
But when the Asian economies were on the growth track leaders such as
Malaysian Finance Minister Anwar Ibrahim have heavily criticized Western
rating agencies of giving poor ratings to East Asian countries when their
external accounts were better than some of the developed countries.
Numismatists will have a chance to indulge their passion for extraordinary coins this week with the Central Bank issuing a series of commemorative coins and a currency note to mark Sri Lanka's Golden Jubilee Independence incorporating a number of special features, including the use of Braille characters.
The Central Bank will issue 5,000 gold coins with a face value of Rs. 5,000. Minted in London, the coin is sold at Rs.8,000 with 200 coins being placed on the international market.
The Central Bank has gauged the market price of these coins in consultation with international experts.
Such special coins increase in value with time.
The gold coin is the exact size of the sterling pound, and is the most expensive commemorative coin to be issued so far, Central Bank Governor A. S. Jayawardena said.
The last British Sterling Pound coin minted in 22 carat gold is said to be trading at £149 each. The Rs. 5 Commemorative coin issued to mark 2500 years of Buddhism (the 'Buddha Jayanthi' coin) is now believed to be trading as high as Rs. 4,500.
The gold coin depicts a 8-9th century gilt bronze sculpture of Bodhisattva Avalokiteshvara. This is regarded as one of the finest works of culture in South Asia outside Buddha statues, which are not used in coins. The Central Bank had consulted Buddhist leaders before using the image of the statue in the new coin.
The coins come in a presentation pack with the certificate of authenticity from the mint.
A Rs.1000 silver coin is also being issued for Rs. 1200 each. It depicts a famous lion sculpture found in Anuradhapura. Twenty five thousand silver coins have been minted.
The Central Bank is also issuing a Rs.10 bi-metal coin for the first time in Sri Lanka. It has a Nickel Brass inner ring (yellowish hue) and a Cupro-Nickel outer ring. It depicts the Pattirippuwa. For collectors it will be available in a plastic sachet in sets of 10 in an untouched mint condition for collectors at Rs. 120. The coins will have its value printed in Braille for the first time.
"All future coin issues will have Braille to enable blind persons
to identify them,'' Mr.Jayawardena said.
The local telecommunications industry received a further boost, when Sri Lanka's wireless loop operator Suntel commissioned their second telephone exchange, giving additional 45,000 lines to its subscribers last week.
Costing a cool Rs. 600mn, the AXEIO switch is designed by Ericsson International and is in service in over 120 countries worldwide.
The second exchange comes on the eve of Suntel's first year of operation in Sri Lanka. It will bring the total switching capacity of the Suntel network close to 100,000, Managing Director Suntel, Jan Campbell said. "This is a reassurance of the confidence we have in the business environment of Sri Lanka.''
Since commencing operations in 1997, over 20,000 subscribers have been connected to Suntel's network. Mr. Campbell admitted Suntel had periodic teething problems due to the lack of connectivity to the Sri Lanka Telecom network.
We are pleased to tell you that last week we have upgraded our facilities with Sri Lanka Telecom and now our customers can enjoy a conjestion free service,'' he said.
Already around 8,000 subscribers have been transferred to the second exchange. With the commissioning of the second exchange, Suntel subscribers can look forward to high quality voice data transmission.
The AXEIO swith is designed to absorb new technologies and permits a more dynamic response to changing market needs.
Suntel switches are incorporated with the lates ISDN capabilities, which could offer business users modern features such as video conferencing, high speed data transmission, and bandwidth on demand.
He said 1997 saw the telecommunications industry expand to accommodate three players in the market. With deregulation, a subscriber is able to get a telephone within a short period. All networks, including the Sri Lanka Telecom are doing their best to give a good service to their customers, as the customer is the king.
"Sri Lanka is a good example for South Asia of how good competition can operate in the telecommunications market,'' he said.
He emphasised that the Telecom Regulatory Authority played a vital role in the highly competitive telecommunications market of Sri Lanka. ''We are looking forward to free and fair competition in the future.''
The final list for the setting up of the 50 new garment factories under the recent budget proposal is due to be released within the next 10 days.
"Work is almost done and the applicants can expect a result within the next 10 days,'' a top BOI official told The Sunday Times Business.
The BOI official said the textile ministry received a
tremendous response' for these factories. Around 170 applications have been received, which have been shortlisted to 77. The final selection is to be done within the next 10 days and the names of the lucky 50 applicants will be submitted to Industries Minister C. V. Gooneratne for approval.
All applications received were from present manufacturers. But preference was given to aggressive investors who have had the courage to invest in Sri Lanka. Successful parties were selected on their ability to demonstrate immediate results, and the capacity to penetrate the non-quota market.
A minimum investment of Rs.20mn is required from each applicant. Each factory is to provide employment to 250 workers including graduates and educated youth. Priority is to be given to Samurdhi beneficiaries.
Each industry will be required to provide transport to employees from the nearest bus station to the factory. Prospective investors will also be allowed to import buses on a duty free basis.
The budget proposal was to establish 25 of these in the Southern Province. ''We have been able to allocate one factory in every electorate in the Southern Province,'' the BOI official said.
The balance factories are to be established in selected districts in other provinces with high rates of unemployment.
The government proposes to generate nearly 25,000 direct and indirect employment opportunities through this programme.
Investors selected, will be guaranteed quotas and BOI incentives. Such investors will be allocated land at designated locations at discounted prices to be paid over a five-year period.
They will also be given utility vehicles on a duty free basis.
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