Daily FT: CB confirms receipt of $ 292.1 m CMPort payment

The Central Bank yesterday confirmed the receipt of the first payment from China Merchant Port Holdings (CMPort) in connection with the public-private partnership (PPP) with the Sri Lanka Ports Authority (SLPA) over the management of the Hambantota Port.

“Subsequent to the agreement signed between the Sri Lanka Ports Authority and the China Merchant Port Holdings Ltd., $ 292.1 million has been credited to the US dollar account of the Government of Sri Lanka maintained at the Central Bank of Sri Lanka,” a statement said.

The Government on 9 December handed over the Hambantota Port to a joint venture company floated by CMPort and SLPA in a PPP exercise which entails an investment of $ 1.12 billion by CMPort.

The balance payment will be received within six months.

Prime Minister Ranil Wickremesinghe officiated the handover of operations of the port to the two joint venture companies – Hambantota International Port Group Ltd. (HIPG) and Hambantota International Port Services Ltd. (HIPS).

The two new companies are likely to invest a further $ 500-600 million in infrastructure development over the project implementation period adding to the country’s FDI inflows.

The Hambantota Port was built during the tenure of former President Mahinda Rajapaksa with a loan of Rs. 193 billion. To date, the port has severely underperformed and recorded an accumulated loss of over Rs. 46.7 billion as at the end of 2016.

Rupee closes firmer on weak demand for dollar

Reuters: The rupee closed firmer on Tuesday as exporter dollar sales and inward remittances surpassed demand for the US currency from importers, dealers said.

The Central Bank on Tuesday said it has received $ 292.1 million in first payment from the leasing of Sri Lanka’s main southern port to the China Merchant Port Holdings Co. Ltd. and the proceeds has been credited to the US Dollar account of Government of Sri Lanka maintained at the Central Bank.

The spot rupee, which traded at 152.85 during the day, ended at 152.65/75 per dollar, compared with Friday’s close of 152.80/153.00.

“Import demand was not there. There are inward remittances and banks are also selling, expecting the rupee to strengthen as import demand is not there,” said a currency dealer.

The rupee has lost 2% so far this year, but currency dealers say dollar demand has slightly waned, lending support to the domestic currency.

The market has been waiting for more clarity over a foreign exchange management act introduced by the government last month.

Foreign investors have net bought equities worth Rs. 18.37 billion ($ 120.18 million) this year as of Tuesday’s close. They bought government securities worth a net Rs. 63.4 billion as of 20 December, official data showed.

Both the currency and stock markets were closed on Monday for a holiday.

Source: Daily FT

Image Courtesy: Daily News