No shortfall in Govt. borrowings: Dep. Treasury Sec.

Witness says not told about the urgent need for Rs.75 bn Says no finance minister had directly informed CBSL about fund requirements

Deputy Treasury Secretary Sajith Attygalle yesterday told the Commission of Inquiry (COI) that there was no shortfall in Government borrowings in January and February, 2015.

Testifying through an affidavit comprising the Treasury’s comprehensive cash flow statements he said there was no huge deficit between the actual debt requirement and the total borrowings during these two months.

Mr.attygalle has been handling the Treasury management,fiscal policy and Treasury Operationd Department since 2012.

According to the witness, the Treasury would usually communicate the fund requirements of the Government to the Central Bank’s Public Debt Department using cash flow statements of the Treasury and in case of an urgent fund requirement by the Government, the Treasury would communicate with the CBSL in writing.

It was revealed earlier that there was a request from the Finance Ministry to the Central Bank in the middle of February 2015 regarding the urgency of raising additional funds amounting to Rs.75 billion.

However, Mr.attygalle said he was not informed by finance ministry secretary or any other government entity regarding such urgent additional fund requirements of the Government prior to the bond sales that took place on February 27, 2015.

When SC Justice Prasanna Jayawardena asked whether there were instances, where a finance minister had communicated directly to the CBSL regarding the government requirement for additional funds, the witness said as far as he was aware no minister had previously communicated directly to the CBSL.

SC Justice Jayawardene also asked the witness about the practice of the Treasury if the Government required funds urgently.

The witness said the Treasury could overdraw the accounts at the BOC and the People’s Bank if there was an urgent fund requirement not exceeding Rs.10 billion.

“But an amount such Rs.75 billion could not be obtained solely from the BOC or People’s Bank, therefore the Treasury would communicate the requirement to the CBSL in writing,” he said and confirmed that even though they were communicated to the CBSL, the ultimate request would be in writing.

The witness’ evidence was led by Senior State Counsel Shaida Barrie. The Commission permitted Counsel Chanaka de Silva who appeared for the former Governor to cross-examine the witness today after analyzing the documents produced by the witness.