Sri Lanka eyes World Bank guarantee for billion dollar loan
ECONOMYNEXT- The World Bank may give terror-struck Sri Lanka a policy-based guarantee which could be used to raise up to a billion US dollars from international markets at a lower rate, Central Bank Governor Indrajit Coomaraswamy said.
"As a part of the World Bank’s efforts to support the country after these events, they are giving credit for reforms which we have already undertaken or are about to finish," the Governor Coomaraswamy told reporters on Friday.
"That’s the flexible they are exhibiting," he said.
Coomaraswamy said that the government is negotiating with the World Bank for 250 million US dollar guarantee, which could be leveraged four times over for a term loan.
"That means the government can go out and borrow up to about a billion dollars, on the back of the World Bank’s AAA rating."
He said borrowing on the World Bank rating instead of Sri Lanka’s rating will lower the interest (risk premium).
"This will bring about significant savings," he said. (Colombo/June03/2019)