Sri Lanka plans Europe listed rupee bonds

ECONOMYNEXT – Sri Lanka is planning to sell internationally traded rupee bonds cleared in Europe, which will increase the liquidity of the securities, Central Bank Governor Indrajit Coomaraswamy said.

The Central Bank was already in talks with EuroClear to settle trades in rupee securities, he said.

He said the sale of rupee debt will reduce exchange risks.

"We have already seen growing confidence in the currency among some large international investors, which means, in the near future, we should be able to issue international bonds in rupees, which would minimise our exposure to exchange rate movements," Governor Coomaraswamy said, delivering a road map for monetary policy in 2017.

"In this endeavour, we are working to cooperate with the Euroclear System to facilitate us to trade our bonds in their system in the future.

"Such an initiative will increase the efficiency and effectiveness of settlement for investors, and increase the pool of savings available for investment in domestic securities."

Analysts say trading in other markets and platforms will also allow foreign investors to sell the bonds to other foreign investors, rather than Sri Lankan buyers.

Sri Lanka was also revamping the public debt law. The Treasury is expected to set up its own debt management unit, freeing the Central Bank from a longstanding conflict of interest. (Colombo/Jan03/2016) 

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