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Thursday May 13th, 2021
Economy

Sri Lanka mulls Renminbi denominated bond: report

Sri Lanka is mulling the issue of government bond denominated in China’s Renminbi currency amid growing links between the two countries, a media report said.

"We have been considering that seriously," Central Bank Governor Nivard Cabraal was quoted as saying by Britain’s Financial Times newspaper.

"Perhaps next year we will be looking at that option because it is a very real opportunity to diversify our funding sources."

The Financial Times said the move will draw geopolitical attention " given concerns  both in the west and neighbouring India" expanding relations between Sri Lanka and China.

China has become a big financier of Sri Lanka’s state projects through loans also equity participation though public private partnerships in two container ports.

China has already given Renminbi denominated loans to Sri Lanka though most are still in dollars.

China’s central bank gave a 10 billion US dollar currency swap to Sri Lanka.

Sri Lanka’s Central Bank is also planning to invest some of its foreign reserves in Renminbi instruments.

Sri Lanka would be the second country after Britain to sell a sovereign bond in Renminbi.

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