Sri Lankan government to raise Rs. 480 million for debt financing
Sri Lanka’s Government Information Department has announced that the Cabinet of Ministers has granted approval to raise Rs. 480 million for debt financing under the Active Liability Management Act (ALMA).
The Cabinet has reportedly approved the proposal presented by Sri Lanka’s Finance Minister Mangala Samaraweera to present a proposal to Parliament to collect a sum not exceeding Rs. 480 billion, in accordance with the provisions of the Active Liability Management Act No. 8 of 2018.
Central Bank of Sri Lanka Governor Indrajit Coomaraswamy in May had reportedly said up to 10 percent of the 2018 debt can be raised under ALMA in 2019.
However, only 4.4 percent of the 2018 debt or 480 billion rupees is expected to be raised in 2019, and may include a mix of foreign and local borrowings, the Central Bank had said.
The local media has stated that Coomaraswamy had said that there are already plans to raise US$ 2 billion more in 2019 under ALMA, to help manage an international sovereign bond maturing in October 2020.
ALMA was enacted in March 2018 to allow borrowings above the ceilings of the annual Appropriation Act and money raised through ALMA must be used for debt servicing, reports stated.
Parliament had last used ALMA in October 2018 to help raise Rs. 310 billion in additional debt.
OSL take:
The government of Sri Lanka’s decision to raise Rs. 480 million for debt financing is indicative of the commitment of the country to meet its debt obligations. Foreign funding agencies have shown confidence in Sri Lanka’s economic policies and have undertaken funding commitments of the country’s development programme.
| Article Code : | VBS/AT/21062019/Z_1 |