GOVERNMENT TO RAISE $500M-1B IN AUGUST
By Ishara Gamage
Sri Lanka's foreign reserves have dropped to a new low of US$ 6.5 billion due to Asian Clearing Union (ACU) settlements, while the government plans to raise another US$ 500-1,000 million within the next month via syndicated loans through the Dubai fund arrangement to boost the weakened foreign reserves, government officials told Ceylon FT.
Speaking to 'Ceylon FT', Ministry of Finance and Planning Deputy Secretary to the Treasury, S. R. Attygalle said they were expecting to raise US$ 550 within the next month via a syndicated loan.
"We have successfully completed our 'Road Shows' and we hope that the syndicated loan could be finalized within the next month", he said.
The government earlier approved to raise US$ 1 billion via syndicated loans subject to this year's borrowing limits. The government has already raised US$ 450 via syndicated loans this year.
Meanwhile, another government source said they were also negotiating to raise US$ 500 via a Dubai- based fund. "Very soon we will finalize this Dubai deal and currently the Ministry of Development Strategies and International Trade and the Central Bank are negotiating the fund transfer arrangement", an official said.
However, they declined to comment about whether the Dubai fund arrangement procedure was a part of the proposed US$ 550 syndicated loan process or not.
Due to US market fears under President Donald Trump's economic policies, most of Middle East funds were now moving towards alternative low risk markets to invest their funds. According to sources, the repayment period of this proposed Dubai transaction might be around 10-12 years and the rate will be below 6%. "It will be a very attractive rate compared to the sovereign bond issues and our main aim is to raise US$ 500 within a few weeks", he said.
Sri Lanka's foreign reserves have now come down to the level of US$ 6.5 after the recent week's US$ 400 million Asian Clearing Union (ACU) settlement.
ACU is a payment arrangement whereby the nine-member participants settle payments for intra-regional transactions among participating Central Banks on a net multilateral basis.
Nearly five to six weeks ago, Sri Lanka's foreign reserves reached a new high of US$ 7 billion with the recently concluded US$ 1.5 B international sovereign bond issue and US$ 450M syndicated loan, Central Bank officials told Ceylon FT.
In addition, the Central Bank is bound to buy dollars from the market to meet the reserve target set by the International Monetary Fund under a $1.5 billion, three-year loan programme.
Meanwhile, the Government is expecting the International Monetary Fund to complete their final review this week and disburse the next tranche under its programme.
The Executive Board of the IMF is likely to meet this week.
According to Central Bank officials, so far this year the Central Bank had bought around US $800 million from the market, out of the $1.2 billion year-end target.
They said the Sri Lankan rupee was still overvalued and they will keep on buying dollars from the market to avoid further appreciation.
On the sidelines of the 20th Annual Meeting of the Asia/Pacific Group (APG) on Money Laundering in Colombo, Central Bank , Indrajith Coomaraswamy said the over-valued rupee was a subsidy to the foreign producer at the expense of the local producer.
The Sri Lankan rupee has fallen around 2.6 % so far this year and currency dealers expecting a further depreciation (up to 4% year end) of the rupee due to the Central Bank's non-intervention policy.
The Bank earlier said the Finance Ministry will keep the proceeds of a recent $1.5 billion sovereign bond in a special US dollar account to repay foreign borrowings.
Officials said with the recent sovereign bond proceeds, the proposed Dubai fund arrangement and syndicated loans and the Hambantota Port deal with China, Sri Lanka's foreign reserves may reach US$ 7.2 billion by the end of the year.
- WP North in command 2365
- The US embraces India: With some Modi-fications 2369
- The West on brink of failing in Afghanistan 2361
- Ranil can at least follow Churchill 2997
- Drought halves electricity generation 2360
- Dengue treatment gets shot in the arm 2496
- 53-year-old killed over dispute 2361
- National Cultural Festival – 2017 2362
- SL’s Service Exports up to 38% in 2016 2363
- Mankulam – the new Trade Hub 2369
- GL demands polls to 3 PCs 2369
- No Military activity allowed at H’tota Port 2367
- No accusation against us as serious as that of Ravi – Basil 2366
- Unions call off strike 2361
- H’tota Port deal signing might be postponed 2410
- CEB GM warns of power cuts 3249
- SAITM Dean on NFTH Board – Rajitha 2379
- Prez requests release 2357
- LTTE remains a terrorist org 2364
- Facing a stiff challenge – Harsha 2375
- US slaps sanctions on Russia, Iran, N. Korea 2356
- Mahendran ordered to handover com. devices 2355
- Ravi K fails to appear 2357
- Fiasco has had a negative impact on Govt 3196
- July’s Russia related bloopers and Putin’s manner 4010
- Querying about queues 2387
- Bitten by sci-fi bug 1490
- Bangladesh: Unremitting Effort 3692
- Can Government be toppled? 3180
- Can the unity govt deliver? 3081
- Rugby chiefs begin passing game 2029
- Gunaratne fractures thumb 1993
- SLT Speedup resumes from Puttalam 1999
- Testing England debut for Roland-Jones 2000
- Dhawan, Pujara make SL toil 1996
- Madrid clinch world record deal 1999
- Kids’ chance to understand golf 1999
- LYCEUM WATTALA U-19 CHAMPS 1997
- Kanrich Finance emerge overall winners 1997
- Championship entries now open 1997
- Nukes? No thanks 1998
- fuel shortage imminent 2584
- Animals to lose peace and quiet at night? 4858
- Right of Reply 4761
- Addressing dengue One hour, one day and every week is enough 5613
- UNP-SLFP government a mess 4004
- NFTH to Facilitate Clinical Training for SAITM 4452
- Prioritize FTAs with China and India – Dr. Wignaraja 3461
- Private medical education fraught with corruption – Prof. Carlo Fonseka 2518
- MULTINATIONALS HAVE SOUNDED DEATH KNELL FOR LOCAL TRISHAW INDUSTRY 4666
- ‘Less Talk, More Action’ needed – State Official 2002
- We are poor because we are corrupt 2001
- Tea Industry not sustainable 2000
- Target unilateral and bilateral trade hybrid 2003
- Shares jump as forex bill passed 2002
- WAY under 10% after 70 months 1999
- SL has exhausted borrowing capacity 2020
- Lanka IOC ensures a round-the-clock supply of fuel during strike 1999
- Apple faces $506M patent dispute payout 1997
- Asia markets close mixed as oil extends gains; Fed awaited 2001
- The New Constitution A Chronological Analysis 2032
- A Whitewash for Failed Politics 2533
- Mattek-Sands horror injury puts Djokovic, Federer in shadow 3072
- World’s fastest growing wetland The Yellow River Estuary 1701
- Harry Potter – A Safe Haven 2198
- How to Answer an Essay Type Question 2197
- Joie de vivre with the one I love 2193
- An Audacious Insurgent - Surekha Samarasena 2194
- Nadi Dosha – an evil that ruins married life– Part 2 1998
- Next four months will be crucial 1983
- Rahu in the 7th obstructs marital life? 1973
- Agate gemstones keep mind and body balance 1943
- There is no success or failure in Love 1951
- Radiobeiträge Radio as Potent Tool of Education 4836
- Speaking with a Forked Tongue 4836
- Global and Local in Hong Kong cinema -Part 2 4857
- Kuchipudi dance recital and Carnatic vocal recital 4812
- Fairway National Literary Awards 2017 4760
- PASCH International Youth Camp 2017 in Embilipitiya Holistic Approach to Education 4816
- History Can Guide us Towards Prosperous Lives 4749
- Melancholia and the Creative Urge 6557
- An endemic cure for snake bite 1114
- Summer holiday camp for kids 1127
- Shouldn’t they live too? 1102
- The dearth of skilled labour in the hospitality sector 1086
- The importance of grooming your pet 1081
- The new face of tea 1103
- Charging victory 1095
- An amazing biking experience 1130
- Young masters of Karate 1123
- Skills for all 1076
- The words,sound and legacy of Chester Bennington 1112
- Marching in celebration 1089