Rupee dip bloats debt

Wednesday, 27 March 2019 00:12 - - {{hitsCtrl.values.hits}}

Between January 2015 and November 2017 external debt has increased the foreign debt by Rs.626.4 billion
Eran says increase in investment shows confidence in SL economy growing

The depreciation of the Sri Lankan rupee between January 2015 and November 2017 has increased the foreign debt by Rs.626.4 billion, the Government told Parliament yesterday, but stressed that foreign investment increases showed that confidence in the Sri Lankan economy was improving.

State Minister of Finance Eran Wickramaratne

Responding to a question for oral answer, the State Minister of Finance Eran Wickramaratne held the rupee had depreciated by 14.6% during the period in focus affecting the amount of total foreign debt of the central Government.

Rejecting impact on rupee depreciation from failing investor confidence on bonds, the State Minister said: “Depreciation of the rupee will lead to increase the foreign debt. This wouldn’t have happened if we took rupee loans.”

“Foreign Direct Investment in 2016 was $1.5 billion. This has gone up to $ 1.7 billion in 2017 and was increased to $2.34 billion last year. This shows the growing foreign direct investment in Sri Lanka,” he confirmed.

According to research, Sri Lanka’s total external debt decreased to $ 53,177.39 million in the third quarter of 2018 from $ 53,487.28 million in the second quarter of 2018. The external debt in Sri Lanka averaged $ 44,865.87 million from 2012 until 2018, reaching an all-time high of $ 53,487.28 million in the second quarter of 2018 and a record low of $ 37,098.10 million in the fourth quarter of 2012. (AH)