1 November 2018 12:00 am
The Central Bank of Sri Lanka yesterday assured the investors that Sri Lanka would meet the maturing international sovereign bond (ISB) obligations worth of US $ 1.5 in January and April next year, despite the current political crisis.
“The ISBs issued in January and April 2014 in United States dollar (USD) 1,000 million and 500 million, respectively are due to mature in January and April 2019. The government has already made pre-funding arrangements for meeting the maturing ISB obligations in 2019 through proceeds of divestment of non-strategic assets and funding through syndicate arrangements,” the Central Bank said in a
brief statement.
Sri Lanka’s foreign exchange reserves stood at US $ 6.4 billion as of September 2018, covering about 3.4 months of imports, down from their peak of US $ 9.0 billion in April 2018.
The international rating agency, Moody’s warned this week that Sri Lanka faces greater refinancing risks in an environment of rising political tensions and tightening financing conditions globally, as Sri Lanka has smaller buffers to manage repayments.
Fitch Ratings also issued similar warning stating that a prolonged power struggle could heighten Sri Lanka’s debt refinancing risks.
The Central Bank stressed that Sri Lanka has maintained an unblemished record on servicing of its debt obligations timely, including the ISBs, since the country’s independence.
The Central Bank said with the help of the government, it has initiated the necessary actions to further diversify international market-based foreign funding sources to jurisdictions outside conventional Eurodollar ISB issuances.