Sri Lanka holds sovereign bond proceeds in dollars to repay foreign debt

ECONOMYNEXT – Sri Lanka’s finance ministry will keep the proceeds of a recent $1.5 billion sovereign bond in a special US dollar account in order to repay foreign borrowings, Central Bank officials said.

Keeping the bond proceeds in dollars was better than converting it and creating lot of rupee liquidity in the local market, Central Bank deputy governor Nandalal Weerasinghe told a meeting of the Foreign Correspondents’ Association of Sri Lanka.

If necessary some of the funds could be converted for cashflow needs.

Last year’s sovereign bond proceeds were also kept in dollars in the same manner by the finance ministry.

Central Bank Governor Indrajit Coomaraswamy said earlier this month that proceeds from the planned lease of the southern Hambantota port to China for $1.2 billion also will be kept in a special dollar account and not used for general budgetary purposes.

Central Bank officials said the government expects to get $450 million from a syndicated loan shortly.
(COLOMBO, May 18, 2017)

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