New Sri Lanka debt law ensures cheaper borrowing: finance minister

ECONOMYNEXT – Sri Lanka’s government will be able to borrow at lower cost and in a timely manner to meet debt repayments with higher borrowing limits approved by parliament under a new debt law, Minister of Finance Mangala Samaraweera said.

Samaraweera has sought parliamentary approval to borrow up to 310 billion rupees in or outside Sri Lanka under the provisions of the Active Liability Management Act No.8 of 2018.

The active liability management framework allows the government to take advanced action to refinance debt, he told parliament Friday.

“The government’s liability management strategy is meant to ease repayment of debt in future and ensure it is done at the lowest possible cost in line with government cash flows and loan maturities,” Samaraweera said.

The active liability management framework has been approved by the Cabinet of Ministers.

Samarweera said the new law provide the much-needed legal framework to adopt borrowing strategies depending on market opportunities.

The government and central bank are already taking action to diversify market-based funding sources by going for Chinese panda bonds, Japan’s samurai bond market and the very liquid sukuk market, he said.
(COLOMBO, 26 Octber, 2018)

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