US Federal Reserve proposal dangerous: Harsha

By Yohan Perera   

Sri Lanka should not put its foreign reserves in danger just to raise international loans, former Minister and Samagi Jana Balawegaya (SJB) candidate Dr. Harsha de Silva said yesterday.   

Dr. de Silva told a press conference that Federal Reserve of USA had proposed that Sri Lanka uses the funds it had invested in US Treasury Bills which is considered as part of its reserves as a collateral to obtain a loan. “This is a first time in the history that a donor had requested for collateral to provide a loan to Sri Lanka,” Dr. de Silva said.  “It is not advisable for Sri Lanka to use its reserves to raise loans as it will lose the opportunity of borrowing more in the future. 

This will also push down Sri Lanka’s credit ratings further,” he added.  At the same time, he said government should not manipulate its economic statistics just to borrow funds from foreign sources.