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Friday, 19 January 2018 00:00 - - {{hitsCtrl.values.hits}}
The Central Bank has called for proposals from banks and investment houses to sell up to $ 2 billion in sovereign bonds in 2018, which is in line with plans outlined by the Monetary Authority at the start of the year.
The bonds can be sold in single or multiple tranches, the Central Bank said, with proposals to be submitted by 23 January 2018.
Central Bank Governor Indrajit Coomaraswamy earlier this month said he would prefer to go to the market early in 2018 before the US Fed raised interest rates further and to ease the pressure in the financial system from bond inflows.
According to the Central Bank, Sri Lanka has about Rs. 1.9 trillion in debt repayments for 2018, which includes about Rs. 600 million in interest rates for international sovereign bonds, about $ 2.5 billion in external payments and Rs. 380 billion in local payments.
Cabinet in its first meeting for 2018 gave approval for the Central Bank to raise up to $ 2 billion from international markets and $ 3 billion from development bonds for debt management and the effort is likely to be aided by the Government’s pending Liability Management Act.
Once the Act is signed by the Attorney General, it will be ready to be tabled in Parliament. The Governor noted the debt situation was “manageable” but emphasised it would only remain so if reforms continued.
Rating agencies had upgraded Sri Lanka’s sovereign rating on the back of a lower budget deficit, higher tax revenues and tighter monetary policy. The Central Bank has announced that the economy is stabilising despite lower than expected growth, and expects to post about 5% growth in 2018 if conditions remain favourable.