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Sri Lanka raised to US $ 2,500mn by foreign loans this year

The Central Bank already has plans to raise up to $ 2,500 million of debt through a syndicated loan and an international sovereign bond to boost the country's foreign exchange reserves to $ 7,500 million by the end of this year, Central Bank officials said yesterday. "We should end the year with US $ 7.4 to 7.5 million on reserves," said the Central Bank Governor, Dr. Indrajit Coomaraswamy. The country currently has about $ 6,000 billion in foreign exchange reserves equivalent to four months of protection against imports. Sri Lanka is an economy based on imports. To achieve the objectives, the Central Bank received Cabinet approval for a syndicated loan of US $ 1,000 million and a sovereign bond of $ 1,000 million, according to Dr. Coomaraswamy. "But we are looking to raise up to $ 1,500 million under sovereign bonds," he said. While noting that the repayment of external debt this year is relatively high compared to recent years, Dr. Coomaraswamy said there is nothing to fear. Sri Lanka needs to be $ 7,040 million in net foreign exchange reserves at the end of this year to remain eligible for the US $ 1,500 million Facility Facility of the International Monetary Fund, which is crucial to cover the balance of payments from the country. Central Bank Deputy Governor, P. Samarasiri said the pressure of imports on foreign exchange reserves now declines due to new relationships between loans and the value of financing of motor vehicles. In addition, despite expectations to the contrary, world fuel prices are not increasing in the short term due to the increased supply of US shale producers, which would likely help, since fuel is the main import Of Sri Lanka. Meanwhile, deputy governor of the Central Bank, Dr. Nandalal Weerasinghe, said that the country must meet 2,600 million in payment of external debt during 2017. Since the repayment of external debt is expected to exceed Sri Lanka 3,900 million And $ 3,400 million in 2019 and 2020 respectively, Dr. Coomaraswamy said that now would be the best time to restructure the country's debts, focusing on new issues of debt this year. Analysts also said that the government should go for external debt refinancing now, while Sri Lanka is able to get the rate cut in the international market because rates rise if the government goes to markets in despair 2019. Dr Coomaraswamy said Although local policy rates unchanged this week, the government's debt this year would translate into local market adjustment, which also helped to keep rates stable. However, he expressed some dissatisfaction with the fact that the country could not raise funds not foreseen by exports, foreign direct investment and portfolio investment to cope with the deterioration of international reserves. "We receive you a billion dollars from China Merchant if the Hambantota agreements arrive and it is impossible to raise another billion dollars by selling non-strategic holdings.When we raise this money we can do some management responsibility, " he added. However, the sale of non-strategic investments has been delayed for over a year and Finance Minister Ravi Karunanayake said recently that these sales can not be hurried. In addition, the Port Hambantota sales contract with China has also experienced many delays.

 
 

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