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Sunday June 26th, 2022

Sri Lanka ex-CB Governor de-stabilized sovereign bond: deputy minister

COLOMBO (EconomyNext) – The first sovereign bond by Sri Lanka’s new administration was undermined by ex-Central Bank Governor and with the name of a former minister also being involved, Deputy Minister Eran Wickramaratne charged in parliament.

"Former Central Bank Governor engaged in a de-stabilizing operation," Wickramaratne said.

"He called the international banks and told them not to lend to the government. This is a savage (mlechcha) act.

"He used the name of the professor, the former finance minister, the former foreign minister (G L Pieis) saying he will petition higher courts as the government was going for the bond unlawfully.

"The Professor is not here, he can correct this tomorrow. This is an attempt to de-stabilize the government. But it is not a des-stabilization of the government, this is a de-stablization of the common man."

Wickremaratne said the administration had to go to the international bond markets to repay loans taken by the Rajapaksa administration.

When he was part of a delegation to Europe, he said he asked the EU to keep the GSP + facility and that human rights problems could be addressed separately.

Ex-Central Bank Governor Nivard Cabraal said he did not tell anyone not to invest but he had warned them that all relevant information should be revealed to investors to protect from future legal complication.

"I have not done anything like that," Cabraal said. "If I can reduce the number of investors in the bond from 450 to 160, I must be quite somebody.

"I asked them to bring to the notice of investors all information relevant and available, because there can be serious legal issues."

Cabraal said in 2007 when then opposition leader Ranil Wickremesinghe said any future UNP administration would not repay the bond, that was also brought to the notice of investors.

The 5-year bond has since been repaid.

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