Quotable Quotes!

“On the maturity of bonds, when most bonds are held by foreigners, there will be a risk on whether the foreigners would take the money out or reinvest upon maturity. Another risk is if foreigners don’t reinvest in Sri Lanka, the Government will have to offer it to the locals. The total available demand is huge. As a result local interest rates might increase. It is a risk taking so we will need to assess it well and adjust ourselves to the future. This might happen in April; but I hope it would not and that we would still be in the comfort zone then as well.”

“Banks will have a problem, not due to the maturity of the Government bonds but because State sector enterprises which have borrowed from State banks must repay. If they are unable to do so, there will be no cash flow, adding a strain on the banking sector.”

– CBSL former Deputy Governor Dr. W. A. Wijewardena

“Banks have been geared up for a 34% loan expansion, which they are now asked to bring down to18%; this would drive credit standards up. How they will manage the 18% over the year will be an issue.”

“For the last two years the reason for an inflow of foreign capital of equity and bond markets was the security that the exchange rate was going to be at a stable level. In this environment when it has changed interest rates will go up, but you can borrow money for almost zero interest rates.”

“If you are getting 9-10% on a three to six month T-bill, if there is further rate adjustment, then people might think the interest rate differential will justify the exchange rate risk, so money might still come in. However, in a broader point, rates of returns in emerging markets and developing countries are going to be higher than the advanced economy in the foreseeable future. Major central banks are still pumping money into the system. There is an awful lot of money out there looking for a place to go and where they are going is to countries with current account surpluses. Emerging markets and developing countries would attract the most money. It makes it more important to regularise the external segment in Sri Lanka.”

– Commonwealth Secretariat Economic Affairs Division’s former Director Dr. Indrajit Coomaraswamy

“We as the business community need to lobby in a way that has an impact. Anyone with half a brain could see the exchange rate needed to be adjusted for the past one year, but nothing happened. The grapevine seems to indicate that the recent phenomenon is because the IMF is holding back the money the CBSL wanted so the IMF got the Government to make a policy decision that was in the best interest for everybody.”

“We must stand together. I have not seen the private sector standing together, having the foot in the door and getting their agenda addressed. If you are big enough and strong enough, you can have an impact on the Government.”

“Some of these things mentioned by Government are nonsensical. We must be rational in what we hear and what we take out of it. We have failed because we have not stood together. These adjustments should have been done a long time ago. We were not strong enough to push for it.”

– CBSL former Assistant Governor Dr. Anila Dias Bandaranaike