Central Bank Chief says Sri Lanka may open a sovereign bond in early 2018
Governor of the Central Bank of Sri Lanka, Indrajit Coomaraswamy has reportedly said the country would like to go to the international market with a sovereign bond in early 2018 before the US Federal Reserve does more rate hikes.
Coomaraswamy has been quoted as saying in the local media that the exact date of the bond sale will depend on market conditions.
He has said the US Federal Reserve was expected to make three 25 basis point hikes next year, and it was best to go to market as early as possible.
US tax cuts and planned infrastructure spending boom may also push the Fed to tighten faster, amid stronger economic growth in the US, Coomaraswamy has been quoted as saying.
The Governor has however declined to reveal a size of the bond sale, but the minimum sovereign size is US$ 500 million.
Sri Lanka has raised volumes ranging from a billion to US$ 1.5 billion US in the past.
Sri Lanka’s last sovereign bond sold at 620 basis points above the US Treasuries yield was not trading at a narrower 550 basis point risk premium showing increased investor confidence, Coomaraswamy has said.
Fitch and Standard and Poor’s have also lifted a negative outlook on Sri Lanka’s rating, he has added.
The Central Bank Governor’s statement that Sri Lanka would go for a sovereign bond sale in early next year has opened up an opportunity for foreign investors to invest in the country’s economy. Given the ongoing development programmes in the country as wells as the assistance received by foreign countries, the Sri Lankan economy is poised for further growth in 2018 and the sovereign bonds would be a great investment option for investors.
|Article Code :||VBS/AT/31122017/Z_5|