Sri Lanka to study feasibility of diversifying and selling Euro, Yen and Renminbi bonds
The Government Information Department of Sri Lanka has reportedly stated that the government has decided to study the feasibility of selling Euro, Yen and Renminbi in a bid to reduce costs of foreign borrowing.
The Department has said the Cabinet of Ministers had granted approval for the Finance Ministry to set up a committee to determine whether diversifying away from the US dollar can cut interest costs.
Sri Lanka has up to now only sold dollar-denominated sovereign bonds.
Central Bank Governor Indrajit Coomaraswamy has been quoted as saying in the local media that Sri Lanka wanted to sell a US$ 250 million Panda (Renminbi) bond later in 2019.
The overall cost will be assessed with a Renminbi/dollar swap, the Governor has said.
According to reports, Sri Lanka’s rupee is loosely pegged to the US dollar and the dollar is also the intervention currency.
OSL take:
Sri Lanka is on the lookout for ways to cut interest costs. Looking for the feasibility of selling Euro, Yen and Renminbi bonds indicates Sri Lanka’s keenness in addressing the issue of the US dollar rate. The sale of Euro, Yen and Renminbi bonds would provide an opportunity for foreign investors to also look at the diversification from the US dollar and interest costs.
| Article Code : | VBS/AT/27082018/Z_8 |