Sri Lanka’s Carsons says 12,000 hectares hit by Indonesia forest law

Thursday October 30, 2025 7:18 am

ECONOMYNEXT – Sri Lana’s Carsons Cumberbatch Plc, which owns Indonesian oil palm plantations, said a new laws to protect forests had hit 12,152 hectares of land connected to group companies.

“Changes relating to spatial planning and forest area management laws in the recent past have introduced additional requirements for plantation companies in Indonesia,” Carsons said in a stock exchange filing.

“In compliance, relevant plantation companies of Goodhope Asia Holdings Ltd, a subsidiary of Carson Cumberbatch PLC and Bukit Darah PLC have submitted necessary applications to the relevant authorities.

“Based on these new regulations, approximately 5,877 hectares of planted area and 6,275 hectares of unplanted area pertaining to five subsidiaries of Goodhope Asia Holdings Ltd are impacted.”

A government task force has repossessed lands and transferred them to PT Agrinas Palma Nusantara, a state enterprise.

“PT ASN is presently engaged in discussions with the Group Companies of Goodhope Asia Holdings Ltd regarding potential arrangements for the management of the plantations on these lands,” the firm said.

“At present, there are no prohibitions on plantation activities within these areas.”

Carsons Cumberbatch, Bukit Darah are among several Malaysian plantation firms that date back to the British era that originally grew rubber.

Under the present owners of Carsons grew oil palm and expanded into Indonesia.

Before macro-economists started to create forex shortages in Sri Lanka from February 1952 after setting up of a central bank with money printing powers, British planters raised capital in what is now called the Colombo Stock Exchange.

At the time Sri Lanka had a currency board arrangement with fixed exchange rate and no policy rate to boost ‘growth’ with rate cuts and trigger economic crises and could easily serve as a financial centre.

Goodhope Asia is incorporated in Singapore, a country which does not have a policy rate and macro-economists cannot create currency crises and is a key financial centre in Asia. (Colombo/Oct30/2025)

Thursday October 30, 2025 9:29 am

ECONOMYNEXT – Sri Lanka’s rupee opened around 304.45/55 to the US dollars in the spot market Thursday around the same levels as the closing a day earlier while bond yields were flat after a fall.

The rupee has fallen from 302.55/60 to the US dollar from the beginning of the month.

The central bank is no longer printing money through open market operations and is giving money only for clearing purposes at the ceiling rate, which encourages banks to fund credit with real deposits.

Some short term rates have moved up which should support the rupee by discouraging non-deposit finance credit even as longer term yields, which should be driven by considerations other than short term liquidity, fell on strong fiscal performance.

The central bank however has a habit of intervening and buying dollars to create excess liquidity from private dollar sellers, but not giving them back when the unsterilized excess liquidity turns into imports via credit.

A weakening rupee can push up losses in state energy utilities as well as current expenditure of the government, putting budgets out of kilter, as well as pushing up dept repayment costs.

Sri Lanka’s budgets were shattered from the 1980s amid currency depreciation after the IMF’s second amendment to its articles, which undermined and discredited the deepest reforms (liberalizations) ever done by a post-independent government and instead triggered social unrest.

The cost of depreciation is not taken into account in calculating budget deficits, perhaps because currency falls were rare before macro-economists started to print money for a ‘policy rate’ and de-stabilize exchange rates in the 1930s as the start of the age-of-inflation analysts say.

A bond maturing on 15.12.2026 quoted 8.20/30 closed at 8.20/28 percent down from 8.25/30 percent yesterday.

A bond maturing on 15.09.2027 quoted 7.75/85 closed 8.75/83 percent down from 9.12/15 percent.

A bond maturing on 01.07.2028 quoted at 9.10/20 closed at 9.10/17 percent from 9.18/25 percent.

A bond maturing on 15.12.2028 was quoted at 9.60/65 closed at 9.60/65 percent 9.63/68 percent.

A bond maturing on 01.07.2030 was quoted 9.75/80 closed 9.73/78 percent from 9.75/78 percent.

A bond maturing on 13.03.2031 was quoted 10.0/10 closed at 10.00/10 percent, from 10.05/12 percent.

A bond maturing on 15.12.2032 was quoted at 10.42/48 percent closed at 10.42/48 percent down from 10.50/55 percent.

A bond maturing on 01.11.2033 was quoted at 10.55/65 closed at 10.57/62 percent down from 10.65/72 percent. (Colombo/Oct30/2025)

Thursday October 30, 2025 6:55 am

ECONOMYNEXT – The Federal Reserve will halt the sell down of government securities, from December 01 and switch agency debt and mortgage-backed securities into Treasuries, the monetary authority said.

The Fed had sharply reduced its sell-down of government securities to just 5 billion dollars a month earlier as US Treasuries yields jumped on worsening government finances.

In the October 29 monetary policy decision, the Fed said it will halt the reduction of its Treasuries holdings.

From December 01, the Fed will reduce agency debt and mortgage-backed securities by 35 billion dollars a month and instead purchase Treasury bills.

It is not clear what will happen to bond coupons.

US 10-year yields are now around 4 percent.

The Fed said its rate on reserve balances (the equivalent of standard deposit facility in Sri Lanka) will be reduced to 3.9 percent down from 4.15 percent earlier.

After many years of stimulus to boost ‘growth’ US government finances are shattered and inflation has eroded the value of savings and wages of citizens, who elected President Donald Trump twice.

Trump had taken an anti-free trade stance, blocked migrant labour which had oiled the US economy for decades, and also started slamming the Fed for not cutting rates.

Meanwhile, cryptocurrencies some precious metals and stocks are soaring.

The housing bubble as well as the recent inflation which hit 40-year highs was fired by the ‘independent’ Fed by it reflation ideology which began around the year 2000. (Colombo/Oct30/2025)

Thursday October 30, 2025 2:21 am

ECONOMYNEXT – The US Federal Reserve cut is policy rate by 25 basis points and said it was halting quantity tightening, citing unemployment though inflation was still high.

“Available indicators suggest that economic activity has been expanding at a moderate pace,” the Federal Reserve said a statement.

“Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments.

“Inflation has moved up since earlier in the year and remains somewhat elevated. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1.”

The Federal Reserve triggered current economic problems in the US with quantity easing which pushed up inflation to 40-year highs and has made the public unhappy and led to rise in socialism and nationalism in the US since the collapse of the housing bubble.

As liberal policies and free trade was discredited during fiscal and monetary stimulus in aftermath of the housing bubble, President Donald Trump was elected twice.

He has triggered global economic problems with trade restrictions, triggered regime uncertainty within the US, as New Deal policies did in the US in the 1930s worsening investor uncertainty and the Great Depression.

Excess liquidity from the abundant reserve regime in the US however has led to record stock prices, and also gold.

Kansas Fed Governor Jeffrey R. Schmid, a former banker voted against the rate cut.

The full statement is reproduced below.

Federal Reserve issues FOMC statement

Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.

In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.