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Reuters : Sri Lanka borrowed over 25%more last year than in 2014, Finance Minister Ravi Karunanayake said on Wednesday, blaming the high cost of refinancing loans he said were raised by the previous government without parliamentary approval.
Karunanayake told parliament that total government borrowing rose 25.6% in 2015 to Rs. 1.74 trillion.
That included a 23% rise in domestic borrowing, to Rs. 1.19 trillion ($8.15 billion), and a 32% jump in foreign borrowing, to Rs. 556.4 billion.
“We had to obtain more loans to repay the loans taken by the previous government without informing the parliament and the cabinet,” Karunanayake said. “Of those loans, 89.9% was to repay the expenses of the last government and rest is for the capital expenditure.”
Prime Minister Ranil Wickremesinghe said on 8 March that former president Mahinda Rajapaksa’s government had not included Rs. 1.04 trillion rupees in borrowing by state enterprises in the national debt, which was estimated at Rs. 8.48 trillion at the end of 2015.
Wickremesinghe said the government owed Rs. 9.5 trillion ($65.6 billion). He also announced plans to raise value-added tax and reintroduce capital gains tax to help tackle Sri Lanka’s high debts ahead of talks on a $1.5-billion loan it is seeking from the International Monetary Fund.
A downgrade of Sri Lanka’s credit rating by Fitch to B+ with a negative outlook and an outlook change to negative by Standard & Poor’s this month have intensified scrutiny of the island nation’s public finances.
The $82.2 billion economy faces a balance-of-payments crisis after the Central Bank burned through one-third of its foreign exchange reserves in the 15 months to January defending the rupee currency.
Last year’s budget deficit is meanwhile expected to have increased to 7.2% of gross domestic product, compared with a target of 4.4 %.
On Wednesday, Wickremesinghe said the government is still undecided on how to repay an estimated Rs. 365 billion debt run up by state-run SriLankan Airlines.
The issue of Sri Lanka Development Bonds (SLDBs) for US$ 150 million has been oversubscribed with total bids received amounting to US$ 380.73 million, the Central Bank said on Wednesday.
Govt. borrows $ 375 m...
The Central Bank on behalf of the government offered to issue of US$ 150 million 3 months, 6 months, 1 year and 2 years tenor to eligible investors for subscription at a rate of either US Dollar 6 month LIBOR plus a margin (floating rate) or at a fixed rate to be determined through competitive bidding.
The issue was open for subscription from 16 to 23 March.
The Central Bank has accepted $ 10.33 million in 3 months bonds after receiving bids worth $ 10.33 million at a fixed rate of weighted average margin over six month LIBOR of 472.12 basis points and $ 38.88 million at a floating rate of weighted average margin over six month LIBOR of 407.14 basis points.
The 6 months bonds received bids amounting to $ 54.0 million and accepted $ 52.0 million at a floating rate of 414.23 basis points.
The Bank accepted all bids of $ 203.46 million received in 1 year bonds at a floating rate of 439.20 basis points and $ 40,000 at a fixed rate of LIBOR plus 525.00 basis points.
The 2 year bonds received bids amounting to $ 72.02 million and accepted $ 71.0 million at a floating rate of 448.73 basis points.
The bonds have a settlement date of 28 March 2016.
AFP: Sri Lanka’s loss-making national carrier will not be able to repay its debt of nearly $1 billion, Prime Minister Ranil Wickremesinghe told parliament Wednesday.
With its own finances in a rocky state, the government will decide within six weeks whether it can afford to take over SriLankan Airlines’ debt repayments, the premier said.
State enterprise development minister Kabir Hashim, who oversees the carrier, earlier this month put its debt at $933 million but on Wednesday it emerged the figure could be higher.
“The minister says the actual debt is likely to be much more than what we initially feared,” Wickremesinghe said during a parliamentary debate on the economy.
“SriLankan Airlines will not be able to repay this debt. We will have to take a decision on this.”
A mounting debt crisis of its own has forced the government to request a bailout of its own from the International Monetary Fund.
The beleaguered national carrier has drawn controversy in recent years after an independent investigator last year found evidence of serious corruption in a $2.3 billion deal to buy Airbus aircraft.
Wickremesinghe said Wednesday he was still reviewing the deal, reached under the administration of former President Mahinda Rajapakse despite huge losses at the airline.
The deal is also being probed by the police Financial Crime Investigation Division.
Last month ratings agency Fitch cut Sri Lanka’s credit rating by one notch to B+ with a negative outlook over its debt crisis.
Negotiations are also underway for a $1 billion currency swap with a Chinese state-owned bank to shore up the country’s dwindling foreign reserves.
