www.combank.lk

1. Economic Capsule
January2022
300th
Issue
Research & Development Unit

2. CONTENTS
BANKING & FINANCE
 ComBank unveils ‘Anagi Women’s Banking’ with exclusive new products
and services
 ‘ComBank Digital’ now available on Huawei AppGallery
 ComBank remittance promo to make 4 millionaires in first 4 months of
2022
 ComBank highest-ranked bank in latest LMD 100 rankings
ECONOMY, BUSINESS & DEVELOPMENT
 IMF cuts global growth forecast as Omicron spreads
 Central Bank increases policy rates
 Inflation – NCPI December 2021
 Unemployment up in 3Q
 Worker remittance income plunges to new low in December
 Sri Lanka’s Manufacturing & Services activities expand in Dec 2021
 Central Bank makes it mandatory for hotel service providers to accept
payments from persons resident outside Sri Lanka in foreign exchange
 Colombo enters best destinations to travel in 2022 list by CNN Travel
 Port City Marina Promenade opened to the public
ECONOMY, BUSINESS & DEVELOPMENT (cont.)
 The Colombo Port City Economic Commission, has provided an
update of the work carried out by them so far since its
establishment
 Access to build SL’s largest warehousing complex with
USD 250mn investment
 Hela Apparel soon in Egypt
 SLINTEC to develop Ammonia-based refrigeration technology to
expand Sri Lanka’s cold storage capabilities.
 SLINTEC ties up with a global partner in value addition to Sri
Lankan minerals
 News Snippets
GLOBALOUTLOOK
 Wealth of world's 10 richest men doubled in pandemic, Oxfam says
 Crypto Crash Erases More Than USD 1Tn in Market Value
 US Inflation rises 7% over the past year, highest since 1982
 Euro zone inflation hit a new record high of 5% in December

3. Banking &
Finance

4. Research & Development Unit
ComBank unveils ‘AnagiWomen’s Banking’
with exclusive new products and services
The Commercial Bank of Ceylon has
unveiled ‘Anagi Women’s Banking’
with a new loan scheme under an
expanded portfolio of initiatives
designed exclusively to support the
aspirations of women.
• The ‘Anagi Women’s Banking’ comprise of the existing ‘Anagi
Women’s Savings Account’ and the new loan product – ‘Anagi
Business Loan for Women Small and Medium Entrepreneurs (WSME)’
and will introduce many more new products and services in the
future.
• The portfolio was designed in collaboration with the International
Finance Corporation (IFC) – under the IFC-DFAT Women in Work
program – using its expertise in increasing access to finance for
women – an important but under-served segment.
The Anagi Business Loan for Women Small
and Medium Entrepreneurs provides female
entrepreneurs with loans for working capital
or investment purposes.
Available exclusively for female business
owners and businesses with female business
partners or directors, this scheme enables
applicants to receive loans from Rs 2mn to
Rs 250mn at competitive interest rates and
with flexible grace periods.

5. Research & Development Unit
‘ComBank Digital’ now available on Huawei
AppGallery
Users of mobile phones from the popular Huawei brand can now
directly download ‘ComBank Digital’ – Commercial Bank’s single omni-
channel digital banking application free of charge from the Huawei
AppGallery.
ComBank remittance promo to make 4
millionaires in first 4 months of 2022
The Commercial Bank of Ceylon has announced that it is starting 2022
on a rewarding note with the launch of ‘Win a Million’ a remittance
promotion that will make four instant millionaires in four months and
reward another 40 recipients of remittances with a total of Rs 1 mn
in cash.

6. ComBank highest-ranked bank in latest LMD 100 rankings
The Commercial Bank of Ceylon has once again become the highest-ranked bank in the ‘LMD 100’
and is among the Top 10 corporate giants for the 28th consecutive year, having been ranked
among the Top 10 every year since the ranking was first published in respect of 1993-94.
CBC #1 in Banking Sector
Top 10 Corporates
The LMD’s Principle ranking is based on Revenue
Category CBC Rank
Assets 1
Profits 2
Shareholders Funds 2
Revenue 4
Source: LMD
CBC Other Rankings, among all Corporates

7. Economy, Business
& Development
News

8. • Global growth is expected to moderate from 5.9 %
in 2021 to 4.4 % in 2022.
• Elevated inflation is expected to persist for longer
than envisioned, with ongoing supply chain
disruptions and high energy prices continuing in
2022.
• The emergence of new COVID-19 variants could
prolong the pandemic and induce renewed
economic disruptions.
Source: IMF World Economic Outlook Update - January, 2022
IMF cuts global growth
forecast as Omicron spreads
Research & Development Unit

9. Central Bank increases policy rates by 50 bps.
Research & Development Unit
a. Increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by
50 basis points each (0.5%), to 5.50% and 6.50%, respectively;
b. Distribute the financing of essential import bills for fuel purchases among the licensed banks in proportion to their
foreign exchange inflows;
c. Mandate all registered tourist establishments to accept foreign exchange only in respect of services rendered to persons
resident outside Sri Lanka;
d. Extend the payment of an additional Rs. 8.00 per US dollar for workers’ remittances paid in addition to the incentive of
Rs. 2.00 per US dollar offered under the “Incentive Scheme on Inward Workers’ Remittances” until 30 April 2022,
reimburse the transaction cost borne by Sri Lankan migrant workers through the payment of Rs. 1,000 per transaction,
when remitting money to rupee accounts via licensed banks and other formal channels with effect from 01 February
2022 and introduce higher interest rates for both foreign currency and rupee denominated deposits of migrant workers.
Full report - Monetary_Policy_Review_No_1_2022
the Monetary Board of the Central Bank of
Sri Lanka, at its meeting held on 19 January
2022, decided to adopt several policy
measures with the view to strengthening
macroeconomic stability.
Accordingly, the Monetary Board decided to:

10. Inflation (NCPI) rises in December 2021
Research & Development Unit
Source: DCS
Headline inflation, as measured by the
year-on-year (Y-o-Y) change in the
National Consumer Price Index (NCPI,
2013=100), increased to 14.0% in
December 2021 from 11.1% in
November 2021, the highest value since
the index was introduced.
• Subsequently, Food inflation (Y-o-Y) increased
to 21.5% in December 2021 from 16.9% in
November 2021, while Non-Food inflation
(Y-o-Y) also increased to 7.6% in December
2021 from 6.2 % in November 2021.

11. Unemployment up in 3Q
Research & Development Unit
According to the Central Bank, Sri Lanka’s official unemployment rate has edged up to
5.2% in the third quarter of 2021 from 5.1% in the second quarter, reflecting that more
people lost jobs during the six weeks of partial closure of the economy due to the
pandemic from mid August.
• Although industries engaged in exports and others categorized as essential services continued
to operate, some had to either scale down their operations or shut them down altogether
resulting in cutting down staff.
• Leisure, entertainment, travel & tourism, and restaurants were the hardest hit and are still
reeling from the effects of the pandemic related restrictions.
• Sri Lanka’s official jobless rate has remained above 5.0% level continuously since the end of
2019 when the rate was at 4.5%.
• An unemployment rate of 4.0% to below is typically recognized as an economy with near full
employment.

12. Research & Development Unit
Worker remittance income plunges to new low in
December, 2021
Sri Lankan migrant workers has repatriated
earnings worth of USD 325.2mn during
December 2021, compared to a USD 812.7mn
in the same month in 2020.
Worker remittances income plummeted as
much as 60% from the same month last year,
extending the declining streak for the eighth
consecutive month.
• The poor December remittance income came amid various incentive and regulatory actions taken by the Central
Bank to woo back migrants to use formal banking channels and to rein in on informal money changers.
• With the December remittances, Sri Lanka received a cumulative remittance income of USD 5,491.5 mn for the
year 2021, compared to USD 7,103.9 mn received in 2020, logging a 22.7% contraction. In absolute terms, Sri
Lanka lost a massive USD 1,612.4mn from worker remittances.

13. Sri Lanka’s Manufacturing & Services activities
expand in Dec 2021
Research & Development Unit
Source: CBSL
The Index
PMI is calculated as a ‘Diffusion Index’,
where it takes values between 0 and 100.
PMI = 50 - sector remained neutral on
month-on-month basis
PMI > 50 - sector is generally expanding
on month-on-month basis
PMI < 50 - sector is generally declining
on month-on-month basis

14. Research & Development Unit
Central Bank makes it mandatory for hotel service
providers to accept payments from persons resident
outside Sri Lanka in foreign exchange
CBSL issued Rules making it mandatory for hotel service providers to accept payments from persons resident
outside Sri Lanka, only in foreign exchange. These Rules are published in the Gazette Extraordinary No.
2263/41dated 21 January 2022.
With the issuance of the Rules, hotel service providers registered with and licensed by the Sri Lanka Tourism
Development Authority are required to;
− Accept payments for services rendered to persons resident outside Sri Lanka only in foreign exchange.
− Deposit such foreign currency into a Business Foreign Currency Account of the hotel service provider or sell to a
licensed bank within three business days.
− Credit payments into a Business Foreign Currency Account of the hotel service provider, in the event such
person resident outside Sri Lanka makes payments using an Electronic Fund Transfer Card (Credit Card, Debit
Card, Travel Card, etc.).
At the same time, hotel service providers may accept payments in Sri Lanka Rupees from persons resident outside
Sri Lanka provided they submit original documentary evidence to prove that such Sri Lanka Rupees represent the
foreign currency brought into Sri Lanka and converted through a licensed bank or an authorized money changer.
Source: CBSL

15. Colombo enters best destinations to travel
in 2022 list by CNNTravel
Research & Development Unit
Sri Lanka’s capital, Colombo, has entered CNN
Travel’s best destinations to travel in 2022 list.
Source: CNN
Destinations included in the list
Antigua & Barbuda
Bissagos Island – Guinea Bissau
Cape Breton – Nova Scotia
Chile
Colombo
Dijon, France
Disko Bay , Greenland
Gabon National Parks
Jordan
Lahti, Finland
Munga-Thirri- Simpson Dessert, Australia
Naples, Italy
Ollantaytambo, Peru
Orkney Island , UK
Oslo, Norway
Palau
Penang, Malaysia
South Africa
St Eustatius, Netherland
Tulsa- Okalhoma, USA
Valencia, Spain
Yellowstone National Park, USA

16. Port City Marina Promenade opened to the public
Research & Development Unit
The Promenade, a 700m-walkway extending from in front
of the presidential secretariat towards the arched
footbridge, is only the first phase of development of
public areas at Port City Colombo.
This walkway joins other adventurous activities open to
the public, such as the Marina, the Aqua Golf Range, and
the ATV Track.

17. Research & Development Unit
The Colombo Port City Economic Commission, set up in June
2021 has provided an update of the work carried out by them so
far since its establishment
• Land plots: The Colombo Port City Economic Commission (CPCEC) has
received 31 out of the 74 land plots technically completed by the
Project Company – CHEC Port City Colombo Ltd (CPCC).
• In turn, the commission has released 06 plots out of the 31 on a 99-
year lease basis, generating USD 200 mn in sales revenue with a
collective investment commitment of USD 600 mn.
• Businesses of Strategic Importance: CPCEC has also identified all 74 primary development plots as Businesses of
Strategic Importance, entitled to the maximum benefits permissible under Section 52 of the CPCEC Act.
• Duty-Free mall: Construction work had begun on the region’s first Downtown Duty-Free (DF) mall, for operation
by two of the world's leading DF operators, positioning the Colombo Port City as a regional shopping destination
• Special Port City-designated shell companies for smooth investor transfers, establishing designated bank
licensing terms, allowing secure, unrestricted foreign currency accounts for investment in the Port City and
expediting approval, investor agreement and licensing processes for potential investors and authorised persons.
Cont.

18. Research & Development Unit
The Colombo Port City Economic Commission, set up in June 2021 has
provided an update of the work carried out by them so far since its
establishment (cont.)
• Appointment of an accounting firm of international standing to manage the finances of the Commission and
the Commission Fund
• Appointment of an audit firm of international standing to perform the Statutory Audit of the Commission and
the Commission Fund.
• International Commercial Dispute Resolution Centre to international operators under a Memorandum of
Understanding with the Ministry of Justice.
• A streamlined Customs process for clearing of both capital goods and consumables into the Port City has been
designed. The commission has also initiated Single Window Facilitation discussions with relevant Government
departments and provided as a pilot project full service (Port Health, Immigration, Customs, and International
Ship and Port Facility Security Code) to the arrival of the Port City’s first super-yacht ‘Kalizma’ at the international
marina on-site
• A Special Port City e-business and Virtual City concept has been completed and submitted for peer review to the
Government of Sri Lanka whilst the Commission has partnered with a leading global technology company to
deploy a state-of-the-art digital platform for all-inclusive investor engagements.
Read More: Colombo Port City EC progressing smoothly,
Colombo Port City Economic Commission forges ahead

19. Research & Development Unit
Access to build SL’s largest warehousing complex with
USD 250mn investment
Access Engineering Group plans to build Sri Lanka’s largest warehousing complex in Ekala with an
overall estimated investment of USD 250mn, which will be leased out to a leading multinational
company.
• The proposed 700,000 square feet warehousing complex is set to become the country’s largest warehousing
complex— three times the size of the current largest such complex in the country.
• The logistic park would also be inclusive of bonded warehousing facilities, subject to approvals from the Sri
Lanka Customs and Ministry of Finance.
• Access Engineering Group Executive Vice Chairman Christopher Joshua revealed that a leading multinational
company has already come onboard to lease the facility from Access Group.
• The multinational is expected to invest US$ 50-75 million in internal infrastructure facilities and the overall
estimated investment in the project is estimated at around USD 250mn.

20. Research & Development Unit
Hela Apparel soon in Egypt
While globally expanding its footprint in a USD 3tn apparel industry, Hela Apparel is to start a new
manufacturing facility in Egypt in the next few weeks, said Hela Apparel Holdings, Group CEO.
• Hela has a manufacturing footprint across six countries with 11 manufacturing facilities while seven of them are
based in Sri Lanka.
• They spread into East Africa in 2015 starting with Kenya and then expanded into Ethiopia, subsequently now
moving into North Africa with Egypt which will kick off in the next few weeks.
• Egypt has the world’s best cotton which helps to produce very fine fabrics and the fact that it’s based in North
Africa allows the company to access Europe in a short time of 3-7 days while also giving access to the Eastern
Coast of US within 12 days.

21. Research & Development Unit
SLINTEC to go global with agreement signing with HBK-CNI to form two
joint ventures (JVs) for Graphene Nano Platelets (GNP) & Ocean Cleaning
Technologies, paving the way for SLINTEC to open its doors to the world
through Dubai.
SLINTEC to develop Ammonia-based refrigeration technology (with Phase Changing
Materials; PCMs) to expand Sri Lanka’s cold storage capabilities. Feasibility check
with Ministry of Transport and Ministry of Agriculture to develop cold storage rail
carriages for transport of frozen/cold storage required goods especially meat, milk,
fruits and vegetables to prevent spoilage and post-harvest loss
SLINTEC to develop Ammonia-based
refrigeration technology to expand Sri Lanka’s
cold storage capabilities.
SLINTEC ties up with a global partner in value
addition to Sri Lankan minerals
Source: SLINTEC

22. Research & Development Unit
News Snippets
India extends forex support of over USD
900mn to SL
India has extended over USD 900 min in facilities to
help Sri Lanka get over its foreign reserve crisis.
Indian High Commission said that the financial
assistance includes USD 400 mn currency swap and
USD 500 mn that was deferred under the Asian
Clearing Union settlement framework.
CSE in talks with firm to list on foreign currency platform
The Colombo Stock Exchange (CSE) is in discussion with a local company with dollar earnings to
go public on the Multi Currency Board (MCB), officials said.
This came after the CSE got approval in July 2021 from the Central Bank allowing local
companies intending to go public on the MCB to open foreign currency accounts for
transactions.
A circular issued by the Department of Foreign Exchange of the Central Bank authorised
companies incorporated here and publicly listed in the CSE to open Special Foreign Currency
Accounts (SFCA) to facilitate foreign currency denominated investments on the CSE. This
approval will enable the launch of the second segment of the MCB.
Sail Lanka launches Marine Training Project in SL’s North
Sail Lanka Yachting Group (SLYG) and ‘Building a Future Foundation (BAFF)’ are to replicate in the
north of Sri Lanka, their successful boat-building and marine training project for youth.
Sri Lanka expects to complete East Container Terminal by July 2024
State-run Sri Lanka Ports Authority plans to complete a partially built East Container Terminal at
a cost over USD 600mn by July 2024 which will boost Colombo Port’s capacity to 10.5mn
containers from the current 7.0mn, officials said.
Record earnings from electronic and electrical sector
Export earnings from electronic and electrical sector in 2021 recorded USD 422 Mn, a 30%
increase compared to USD 328 mn recorded last year, despite COVID-pandemic challenges. The
sector is ambitious to reach a USD 1 bn export target by 2025.
The industry consisting of more than 100 engaged in design manufacturing and exporting of
electronic and electrical products and services with approximately 37,000 employees that
include high profile researchers and design engineers.
Summary of External Sector performance
Jan-Nov
2020
USD mn
Jan-Nov
2021
USD mn
Change
(%)
Merchandise
Exports
9,083 11,345 24.9
Merchandise
Imports
14,529 18,396 26.6
Trade balance -5,446 -7,051

23. Global
Update

24. Wealth of world's 10 richest men doubled in pandemic,
Oxfam says
Research & Development Unit
Source: BBC
The pandemic has made the world's wealthiest
far richer but has led to more people living in
poverty, according to the charity Oxfam.
Lower incomes for the world's poorest contributed to
the death of 21,000 people each day, its report claims.
But the world's 10 richest men have more than
doubled their collective fortunes since March 2020,
Oxfam said.
Oxfam typically releases a report on global inequality
at the start of the World Economic Forum meeting in
Davos.
While collectively their wealth grew from USD 700bn
to US 1.5tn between March 2020 and November 2021,
there is significant variation between them, with
Mr Musk's fortune growing by more than 1,000%,
while Mr Gates' rose by a more modest 30%.
According to Forbes, the world's 10 richest men are:
Elon Musk, Jeff Bezos, Bernard Arnault & family, Bill
Gates, Larry Ellison, Larry Page, Sergey Brin, Mark
Zuckerberg, Steve Ballmer and Warren Buffet.

25. Crypto Crash Erases MoreThan USD 1Tn in MarketValue
Source: Bloomberg
Research & Development Unit
With the Federal Reserve intending to
withdraw stimulus from the market, riskier
assets the world over have suffered.
Bitcoin, the largest digital asset, lost
more than 12% on 21.01.22 and
dropped below USD 36,000 to its
lowest level since July 2021 .
Since its peak in November 2021 , it
has lost over 45% of its value.
Other digital currencies have
suffered just as much, if not more,
with Ether and meme coins mired in
similar draw downs.

26. Research & Development Unit
US Inflation rises 7% over the past year, highest since
1982
US Inflation plowed ahead at its fastest
12-month pace in nearly 40 years during
December, according to a closely
watched gauge the Labor Department
released
The consumer price index, a metric that
measures costs across dozens of items,
increased 7%, according to the
department’s Bureau of Labor Statistics. On a
monthly basis, CPI rose 0.5%.
The annual move was the fastest increase since
June 1982 and comes amid a shortage of goods
and workers and on the heels of unprecedented
cash flowing through the U.S. economy from
Congress and the Federal Reserve.
Source: CNBC

27. Euro zone inflation hit a new record high of 5% in
December
Research & Development Unit
Euro zone inflation hit a new record high in December, raising more questions about the European
Central Bank’s monetary policy.
Preliminary data showed that the headline inflation rate came in at 5% for the month, compared to
the same month last year. The figure represents the highest ever on record and follows November’s
all-time high of 4.9%.
The increase was mostly due to higher energy prices.
“After reaching 5.0% in December, headline euro-zone inflation should fall this year as the energy component
plummets,” Capital Economics said in a note.
Inflation has been in the spotlight after consecutive increases in recent months, with money managers debating
whether the European Central Bank should be taking a more aggressive stance to combat rising prices.
The central bank said last month that it would be cutting its monthly asset purchases, but vowed to continue
its unprecedented level of stimulus in 2022.

28. The views expressed in Economic Capsule are not necessarily those of the Management of Commercial Bank of Ceylon PLC
The information contained in this presentation has been drawn from sources that we believe to be reliable. However, while we have taken reasonable care to maintain
accuracy/completeness of the information, it should be noted that Commercial Bank of Ceylon PLC and/or its employees should not be held responsible, for providing the
information or for losses or damages, financial or otherwise, suffered in consequence of using such information for whatever purpose.
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