On December 25, 2024, it was reported that the cost of key ingredients for Sri Lanka's Christmas cake fell by 7.3% in 2024, attributed to deflationary policies and currency appreciation under Central Bank Governor Nandalal Weerasinghe. The total cost of 11 ingredients was 14,774 rupees, down from 15,913 rupees in 2023. Notably, the difference in ingredient costs from 2022 to 2024 was only 0.8%, reflecting a period of relative stability in pricing [09c74dc5].
This decrease in costs comes amidst a backdrop of ongoing economic challenges, including a significant depreciation of the Sri Lankan rupee, which traded at 297.00/50 against the US dollar on December 24, 2024. This marked a decline from 296.25/75 the previous day, highlighting the currency's volatility amidst rising inflation and high consumer taxes on essential goods [8bdebfbc].
In the bond market, yields have risen, with a bond maturing on September 15, 2027 quoted at 9.77/87 percent, up from 9.55/75 percent. The All Share Price Index rose by 0.52 percent to 15,099, while the S&P SL20 index increased by 0.36 percent to 4,528, suggesting some investor confidence amidst the turmoil [8bdebfbc].
The Central Bank is conducting a treasury bill auction of 120,000 million rupees to manage liquidity in the economy [5f89bcb6]. Additionally, Moody's upgraded Sri Lanka's sovereign rating to Caa1 from Ca on December 23, 2024, citing improved governance and the implementation of reforms as key factors in this decision [8bdebfbc].
The government has also extended the rice import deadline to January 10, 2025, allowing for additional imports due to ongoing supply issues. Approximately 70,000 metric tonnes of rice have been imported, reflecting the government's response to food security concerns [8bdebfbc].
In a broader context, President Anura Kumara Dissanayake emphasized the need for a just and compassionate society in his Christmas message, reflecting the social challenges faced by many Sri Lankans during this economic period [09c74dc5]. Furthermore, the Cabinet approved the ratification of the BBNJ convention for marine biodiversity conservation, indicating a commitment to environmental issues [09c74dc5].
As Sri Lanka grapples with these economic challenges, it is noteworthy that Bolivia's poultry sector is facing a crisis similar to that of Sri Lanka, driven by rising costs and shortages [8bdebfbc]. The interplay of domestic policies and international economic conditions will be crucial in shaping the financial futures of both nations.