Connect with us

Business

Sri Lanka calls on China to restructure debt repayments

Avatar

Published

on

President Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in Colombo.

Sri Lanka’s President Gotabaya Rajapaksa has asked China to help restructure debt repayments as part of efforts to help the South Asian country weather a worsening financial crisis.

Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in Colombo on Sunday.

Sri Lanka has benefited from billions of dollars in soft loans from China but the island nation is currently in the midst of a foreign exchange crisis placing it on the verge of default, according to analysts.

“The president pointed out that it would be a great relief to the country if attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the Covid-19 pandemic,” Rajapaksa’s office said in the statement.

READ MORE: How China’s debt trap diplomacy works and what it means

China is Sri Lanka’s fourth biggest lender, behind international financial markets, the Asian Development Bank (ADB) and Japan.

Over the last decade China has lent Sri Lanka over $5 billion for highways, ports, an airport and a coal power plant. But critics charge the funds were used for white elephant projects with low returns, which China has denied.

“China has always helped Sri Lanka develop its economy as best as we can,” said foreign ministry spokesman Wang Wenbin at a daily briefing in Beijing on Monday.

“We will continue to do so in future.”

‘Concessional terms’

Rajapaksa also requested China to provide “concessional terms” for its exports to Sri Lanka, which amounted to about $3.5 billion in 2020, the statement said, but did not give more details.

Rajapaksa also proposed allowing Chinese tourists to return to Sri Lanka provided they adhere to strict Covid-19 restrictions, including only staying at pre-approved hotels and visiting only certain tourist attractions.

Before the pandemic China was Sri Lanka’s main source of tourists and the island imports more goods from China than from any other country.

Sri Lanka is a key part of China’s Belt and Road Initiative (BRI), a long-term plan to fund and build infrastructure linking China to the rest of the world, but which others including the United States have labelled a “debt trap” for smaller nations.

READ MORE: Sri Lanka’s balancing act between India and China enters new phase

Sri Lanka has to repay about $4.5 billion in debt this year starting with a $500 million International Sovereign Bond (ISB)maturing on Jan. 18.

A $1.5 billion yuan swap from China helped the island boost its reserves to $3.1 billion at the end of December.

Source: TRTWorld and agencies

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

UK inflation hits almost three-decade high as living costs soar

Avatar

Published

on

By

The cost of living in Britain is forecast to increase even higher in April owing to a tax hike and further planned increases to domestic energy bills, analysts say.

The annual rate of inflation in Britain has risen to a near 30-year high in December, stoking fears about a cost-of-living squeeze as wages fail to keep pace.

Inflation accelerated to 5.4 percent in the 12 months through December, up from November’s 5.1 percent, the Office for National Statistics said on Wednesday.

Last month’s annual figure is the highest since March 1992, when inflation stood at 7.1 percent.

“Food prices again grew strongly while increases in furniture and clothing also pushed up annual inflation,” said ONS chief economist Grant Fitzner.

The Bank of England (BoE), whose chief task is to keep inflation close to 2.0 percent, is now expected to raise rates again at its next meeting in February amid easing concerns over economic fallout from the Omicron coronavirus variant.

On Wednesday, the pound hit a near two-year peak versus the euro on increased expectations of another rate rise, while the European Central Bank has yet to follow the BoE in tightening monetary conditions.

READ MORE: Explained: Europe caught in highest inflation in nearly 30 years

Surging costs

Economies worldwide are battling decades-high inflation that is forcing central banks to lift interest rates, including the BoE which last month raised its key borrowing cost — to 0.25 percent from a record-low level of 0.1 percent — for the first time in more than three years .

The cost of living in Britain is forecast to soar even higher in April owing to a tax hike and further planned increases to domestic energy bills, according to analysts.

National insurance, paid by workers and employers, is being increased to help fund social care for the elderly. Analysts expect more painful tax increases to foot the vast bill for Covid.

In addition, electricity and gas prices are set to rocket higher when the UK government shortly lifts a cap on energy bills amid record-breaking wholesale costs.

“With consumer prices rising at their fastest rate for three decades and wage growth slowing, Britons are being squeezed ever harder by the cost of living,” said Jay Mawji, head of trading provider IX Prime.

Consumers and businesses are struggling with surging costs, ongoing pandemic turmoil and supply chain problems.

At the same time, real wages in November fell on the year for the first time since mid-2020, official data showed on Tuesday.

“More pain lies ahead in the form of tax rises in April and a likely 50-percent jump in energy bills,” said IX Prime’s Mawji.

READ MORE: US consumer prices hit four-decade high in December

Source: TRTWorld and agencies

Continue Reading

Business

Turkiye, UAE central banks sign swap deal

Avatar

Published

on

By

The agreement aims to enhance bilateral trade and to further strengthen financial cooperation between the two countries.

Central banks of the United Arab Emirates and Turkiye have inked bilateral currency swap agreement.

According to a statement by the Turkiye’s Central Bank on Wednesday, the nominal size of the deal is mutually 18 billion UAE dirham and 64 billion Turkish liras.

The agreement aims to enhance bilateral trade and to further strengthen financial cooperation between the two countries.

“It will stand for a period of three years, with the possibility of an extension through mutual agreement,” the statement noted.

This agreement demonstrates the two central banks’ commitment to deepen bilateral trade in local currencies in order to advance economic and financial relations between our countries, Sahap Kavcioglu, the Turkiye’s Central Bank governor, said after signing the deal.

READ MORE: A new dawn: Turkey and the Arab world choose cooperation over conflict

Enhancing bilateral cooperation

The chief of UAE Central Bank Khaled Mohamed Balama also said: “Signing this agreement with the Central Bank of the Republic of Turkiye reflects each nation’s desire to enhance bilateral cooperation in financial matters, particularly in the fields of trade and investments between the two countries.”

With this latest agreement, the Turkiye’s Central Bank’s total swap figure with foreign central banks reached $28 billion.

Turkiye and the UAE signed a total of 10 agreements on energy, environment, finance, and trade during a visit by Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al Nahyan to Ankara last November.

The UAE has also allocated a $10 billion fund for direct investment in Turkiye, the Abu Dhabi Developmental Holding Company also announced.

As of November, the bilateral trade volume stood at $7.1 billion. Turkiye’s imports from the UAE totaled $2.2 billion, while its exports to the country stood at $4.9 billion.

READ MORE: Erdogan vows to fight inflation, higher interest rates

Source: TRT

Continue Reading

Business

Airlines worldwide change flights over US 5G problem

Avatar

Published

on

By

The 5G issue appeared to particularly impact the Boeing 777, a long-range, wide-body aircraft used by carriers worldwide.

Airlines across the world have rushed to cancel or change flights heading into the US over an ongoing dispute about the rollout of 5G mobile phone technology near American airports.

Dubai-based Emirates, a key carrier for East-West travel, announced it would halt flights to Boston, Chicago, Dallas-Fort Worth, Houston, Miami, Newark, New Jersey, Orlando, Florida, San Francisco and Seattle over the issue beginning Wednesday. It said it would continue flights to Los Angeles, New York and Washington.

The issue appeared to particularly impact the Boeing 777, a long-range, wide-body aircraft used by carriers worldwide. Two Japanese airlines directly named the aircraft as being particularly affected by the 5G signals as they announced cancellations and changes to their schedules.

In its announcement, Emirates cited the cancellation as necessary due to “operational concerns associated with the planned deployment of 5G mobile network services in the US at certain airports.”

“We are working closely with aircraft manufacturers and the relevant authorities to alleviate operational concerns, and we hope to resume our US services as soon as possible,” the state-owned airline said.

The United Arab Emirates successfully rolled out 5G coverage all around its airports without incident, like dozens of other countries.

But in the US, the Federal Aviation Administration worries that the C-Band strand of 5G could interfere with aviation equipment.

READ MORE: AT&T, Verizon delay 5G implementation at some US airports

Interfere with aircraft altimeters

Of particular concern in the 5G rollout appears to be the Boeing 777, a major workhorse for Emirates, which only flies that model and the Airbus A380 jumbo jet. Its Mideast competitor, Qatar Airways, anticipates “minor delays” on return flights from the US but says otherwise its dozen US routes are operating as scheduled.

Japan’s All Nippon Airways Co. Ltd. said in a statement that the FAA “has indicated that radio waves from the 5G wireless service may interfere with aircraft altimeters.” Altimeters measure how high a plane is in the sky, a crucial piece of equipment for flying.

“Boeing has announced flight restrictions on all airlines operating the Boeing 777 aircraft, and we have cancelled or changed the aircraft for some flights to/from the US based on the announcement by Boeing,” ANA said. It cancelled 20 flights to the US over the issue to cities such as Chicago, Los Angeles and New York.

Japan Airlines Co. Ltd. similarly said that it had been informed that 5G signals “may interfere with the radio altimeter installed on the Boeing 777.”

“We will refrain from using this model on the continental United States line until we can confirm its safety and we regret to inform you that we will cancel the flight for which the aircraft cannot be changed to the Boeing 787,” the airline said. Eight of its flights were affected Wednesday — three passenger trips and five for cargo.

Chicago-based Boeing Co. did not immediately respond to a request for comment.

Air India also announced on Twitter it would cancel flights to Chicago, Newark, New York and San Francisco “due to deployment of the 5G communications” equipment. It said it would try to use other aircraft on US routes as well.

The cancellations come even after mobile phone carriers AT&T and Verizon will postpone new wireless service near some US airports planned for this week.

The FAA will allow planes with accurate, reliable altimeters to operate around high-power 5G. But planes with older altimeters will not be allowed to make landings under low-visibility conditions.

READ MORE: US airlines warn of ‘chaos’ if 5G allowed near airports

Source: AP

Continue Reading

Trending