<p>Sri Lanka’s Central Bank Governor has said Colombo may look to extend a loan agreement from the International Monetary Fund (IMF), which was frozen amidst political turmoil on the island, He called on the government not to make any political concessions with the country’s budget ahead of forthcoming elections.</p> <p>"There is a provision for the Extended Fund Facility (EFF) to be extended by a year," said Indrajit Coomaraswamy. "The government could negotiate if it wants to."</p>

Sri Lanka is to face a shortage of milk powder following a decision by several leading companies to suspend milk powder imports, due to rising costs, the Sunday Times reports. 

Several milk powder company heads told the Sunday Times that the government has not allowed them to increase the price of milk powder to consumers, leaving them with no choice but to “stop imports and also stop selling existing stocks of whole milk powder”.

<p>A Colombo Municipal Councillor with the Sri Lanka Podujana Peramuna (SLPP) has been arrested over violence in the capital last October, where a protestor was shot dead amid&nbsp;political turmoil on the island.</p> <p>Councillor Kulathissa Deeganage was arrested by the Colombo Crimes Division (CCD) in connection with the violence outside the Ceylon Petroleum Corporation (CPC) premises in Dematagoda.</p> <p>The bodyguards of Sri Lanka’s Minister of Petroleum Arjuna Ranatunga shot into crowds blocking him from entering his office, after Colombo was plunged into crisis as Mahinda Rajapaksa was unexpectedly appointed as prime minister.</p>

<p>The Northern Province's governor, Reginald Cooray has faced criticism after he called off a probe into reports of negligence causing flooding in Kilinochchi.</p> <p>The probe, which was to be headed by Professor S Sivakumar of the University of Jaffna's Engineering Faculty, was set up amid reports Iranamadu tank was allowed to overfill before all the sluice gates were opened at once.&nbsp;&nbsp;</p> <p>Speaking to the Sunday Times, Sivakumar said he was surprised when the governor called off the probe within 30 minutes of its planning meeting.&nbsp;</p>

Sri Lankan police claimed today two phones reportedly recovered from a bag of a suspect during the military search operation in Vavuniya on Tuesday, belong to a former LTTE cadre. 

The former cadre, who has not been named, is understood to live in Vavuniya. 

There was a tense situation in Vavuniya on Tuesday after soldiers and Special Task Force (STF) officers conducted a search operation in Puthur for a suspect. 

The massacre of ten Tamils, including a local parish priest, by the Sri Lankan army was remembered today in Mannar. 

Armed soldiers arrived at the Vankalai Church on January 6, 1985, and shot dead Father Mariya Bastian and nine other locals, including children who were living with him, at the entrance of the building. 

The Sri Lankan military announced that it had constructed houses for two “deserving” Tamil families in Jaffna, where it continues to occupy vast swathes of lands, without stating how the Tamil families were chosen.

Mahinda Rajapaksa, currently Sri Lanka's opposition leader, vowed not to allow the country to be divided through a new constitution. 

Referring to attempts by the UNP and TNA to establish a new constitution for the island, Rajapaksa warned it would "pave the way to divide the country". 

"The national question could not be resolved through a Constitution, which would incite hatred among the communities but it should be a Constitution agreeable to all communities of Sinhala, Muslim and Tamil," Rajapaksa said, speaking at an event in Amparai yesterday. 

The 'World Day of War Orphans' was marked at event in Barathipuram, near Muttur, Trincomalee today. 

A local Hindu organisation distributed educational material and books to students, particularly those from families of the disappeared. 

 

The Sri Lankan military held a series of elaborate events in Mullaitivu last month as two divisions celebrated their occupation of the region, almost ten years since army's massacre tens of thousands of Tamils.