Unhealthy for SL to raise funds through 'Panda bonds' : JO

The Central Bank’s move to raise US$250 million through China’s ‘Panda bonds’ is not healthy and clearly shows that the CB’s authority to obtain loans has been handed over to the People's Bank of China, the joint opposition (JO) said today.

JO MP Bandula Gunawardana told a news briefing that the People's Bank of China would issue Panda bonds to Chinese citizens on a request made by the Central Bank of Sri Lanka.

“The Panda bonds are issued to Chinese citizens and later converted to US dollars from Renminbi. Our Central Bank is so bankrupt that it is now asking China to issue bonds to its citizens to raise US$250 million on our behalf,” he said.

The MP said the financial chaos in the country was spinning out of control because of inefficient economic management and the resultant decrease in foreign reserves.

He said Sri Lanka’s foreign reserves worth US$9.9 billion in April 2018 had dropped to US$8.4 billion at the end of July.

“What happened to the US$1.5 billion within such a short time? The simple answer is that the Central Bank has released dollars to the market to artificially prevent the rupee value against the US dollar from hitting 200. In May and June, it released US$357 million to the market to prevent the rupee from depreciating. The CB should reveal whether it used the entire US$1.5 billion for this purpose. On the one hand CB is releasing dollars into the market and on the other hand it is raising money through Panda bonds,” the MP said.

He said the President and the Prime Minister should intervene and prevent an economic collapse. (Lahiru Pothmulla)