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Thursday September 29th, 2022

Sri Lanka FinMin to direct state firms to borrow at 4%: cabinet spokesman

Finance Minister Basil Rajapaksa

ECONOMYNEXT – Sri Lanka’s Finance Minister Basil Rajapaksa is in the process of directing financially struggling state institutions to borrow funds at a 4 percent interest rate, Cabinet Spokesman Keheliya Rambukwella said on Tuesday (10).

“If any of the 270 plus government institutions are facing difficulties, they can obtain loans at 4 percent interest rate instead of getting it from the treasury. The current finance minister is on the process of doing this,” Rambukwella told the reporters at the weekly cabinet briefing.

The move comes as the government finance is not in a position to afford loans amid a sharp fall in state revenue and increased expenses over COVID-19 control measures.

“It is a good move I believe because these state institutions will have some responsibility and they will have some awareness (about finances). Even the central bank has to borrow either from bonds or other institutions,” said Rambukwella.

Sri Lanka’s treasury is facing a daunting task of generating funds to meet the government’s day-to-day expenses.

Recently appointed Finance Minister Basil Rajapaksa immediately after his appointment said he will have to “take certain unpopular decisions, just like how a father would for the betterment of his children and family”. (Colombo/Aug10/2021)

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