Govt can use Active Liability Management Act to borrow- Harsha
ECONOMYNEXT – Former MP Harsha De Silva is saying that the government can take advantage of historically low interest rates to take the required loans to repay the country’s debts through the Active Liability Management Act.
Interest rates for US 10 year bonds is recorded below 1% the lowest in 150 years.
Speaking to reporters this morning, the former Minister of Economic Reforms and Public Distribution said that the previous government brought this Act through parliament because 2020 is the year with the largest debt repayment by Sri Lanka.
He said that this Law gives the government the opportunity to take loans bigger than the required amount when the international interests rates of loans go down.
“Although the current government opposed the Act while they were in the opposition, the Act has given them a real opportunity,” he said.
Further, he said the government can continue to keep petroleum controlled prices at current rates and not pass on the effects of the global crash in oil prices and earn income for the Treasury as revenues have fallen.
“It is just one step,” he said and went onto say that the government cannot stop foreign exchange leaving the country or stop foreign investments in treasury bills and bonds leaving the country.
De Silva added that government cannot amend the tax concessions they gave targetting the elections or force the businesses to pass on the relief to the consumers.
Also, he said that he wishes that Coronavirus does not get spread in Sri Lanka, “if it starts to spread within the country we will have to face a series of problems,” he added.(Colombo/Mar11/2020)
– Reported by Imesh Ranasinghe