ECONOMYNEXT- Sri Lanka will seek parliamentary approval to raise up to 480 billion rupees in additional debt through the Active Liability Management Act (ALMA) to repay maturing borrowings after obtaining cabinet approval, an official statement said.
The cabinet approved Finance Minister Mangala Samaraweera's proposal to seek parliamentary approval for the debt raising, the cabinet office said in a statement.
The funds are to be used for repaying debt from 2020 to 2029, the statement said.
Central Bank Governor Indrajit Coomaraswamy in May had 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.
Coomaraswamy had said that there are already plans to raise 2 billion US dollars 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.
The Appropriation Act for 2019 had allowed for raising 2.5 billion US dollars in sovereign bonds to meet budgetary cashflows.
Money raised through ALMA must be used for debt servicing.
The parliament last used ALMA in October 2018 to help raise 310 billion rupees in additional debt.
Sri Lanka is currently in a peak debt repayment cycle until 2022.
There are high repayments from 2025 to 2027 as well, after which debt maturities ease. (Colombo/Jun19/2019)