Cabinet nod to borrow US $ 250mn from ADB to develop capital market

The Cabinet approval has been given for the Finance Ministry to start negotiations for a US $ 250 million loan with the Asian Development Bank (ADB) to improve Sri Lanka’s capital market. 

“(The loan is) for the development of an efficient, fixed and transparent capital market with a strong regulatory framework, with the view of collecting financial resources required for the economic development productively through the Sri Lankan capital market,” a Cabinet statement said.

The loan is to come as part of US $ 650 million in additional funding facilities opened by the International Monetary Fund when it decided to provide Sri Lanka with a US $ 1.5 billion three-year Extended Fund Facility attached with heavy fiscal reforms, this June.

ADB Operations 1 Vice President Wencai Zhang, who visited Sri Lanka in July, had said that the ADB was willing to fund Sri Lanka for capital market reforms.The government is hoping to make Sri Lanka a mini financial hub for Asia and is pushing for fiscal and monetary reforms required to reach this status.