Sri Lanka should follow Malaysia's example in selling project specific bonds for infrastructure, which will give confidence that money is not mis-directed and make it easier to tap money for capital investment, a senior financial expert said.

Stock analysts are urging investor caution on speculative investment in Environmental Resources Investments (ERI) which announced firmed up plans to raise over two billion rupees in fresh equity soon.

Sri Lanka's budget deficit for 2009 has hit 9.7 percent of gross domestic product (GDP), with a planned 7.0 percent deficit de-railed by falling revenues and higher expenditure, a finance ministry report said.

The top US diplomat in Sri Lanka said the country should address the issue of greater transparency in business dealings to build investor confidence and attract more American investment.

The country will not be hurt by the loss of the GSP Plus concession from the EU as all the remedial measures have been taken to maintain the economy minus the trade concession, said Central Bank Governor Ajith Nivard Cabraal in an interview to Daily Mirror online.

Sri Lanka is to start test runs on extending to several government agencies a long-delayed automated documentation system for trade that allows cargo to be cleared electronically, officials said.

Sri Lankan shares ended higher Monday and turnover was pushed up by big transactions in blue chips with investor V Vijayaratnam raising his stake further in Asia Capital, brokers said. Stocks gained 1.5% in brisk early morning trade and turnover in the first 90 minutes exceeded Rs. 1 billion, according to First Guardian Equities. The All Share Price Index closed at 3,789.37, up 2.23 percent (82.65 points) while the more liquid Milanka index rose 2.45 percent (104.57 points) to close at 4,373.75.

The lending rates of the two loan schemes operated by the Central Bank for the development of the North and East, aimed at enhancing income generating activities, has been reduced to 9 percent per annum from 12 percent per annum with effect from January 1, the bank announced recently.

The International Monetary Fund has recognized Sri Lanka as a country with a ‘Middle Income Emerging Market’ status, upgrading Sri Lanka from the list of Poverty Reduction and Growth Trust (PRGT) eligible countries.

“The average prices of consumer products are on the increase at an average rate of 11 percent,” former Deputy Governor Central Bank, W. A Wijewardene said at a forum in Colombo.