Govt. to go for $ 1.5 b bonds in 2017

Cabinet has given approval for the Government to borrow $ 1.5 billion in development bonds that will be issued by the Central Bank in 2017, which would be partly used to cover matured bonds over the next 12 months. 

The Cabinet paper presented by Finance Minister Ravi Karunanayake noted that the $ 1.5 b will be part of the total Government borrowing of Rs. 1,579 billion that was approved by Parliament. 

“The continuing robust inflows of remittances and other foreign currency inflows and reinvestment of maturing bonds are expected to be invested in bonds. The issuance of bonds will further strengthen flexibility in the domestic borrowing program and help strengthen the reserves of the country,” it added. 

Bonds worth $ 1.878 billion will mature in 2017 and the proposed issuance will be able to cover a part of such maturities. The remaining $ 378 million worth of maturing bonds will be financed either through the anticipated proceeds of the Foreign Currency Term Financing Facility of $ 300-$ 1 billion or any other suitable financing options available during the maturity period of bonds, the paper added.