Sri Lanka may borrow ...

According to the Central Bank, the government would also consider financing from domestic sources, without only limiting itself to foreign financing.

Dr. Coomaraswamy noted that the Cabinet approval for the US $ 2 billion borrowing is likely to be received within 10 days.

Once the Cabinet approval is granted, he said that the Central Bank would appoint lead managers.

The World Bank has also offered a policy guarantee to Sri Lanka as assistance to the country in the aftermath of the Easter Sunday attacks.

“There is a possibility that the World Bank will take on an exposure of US $ 250 million, which can be leveraged four times over.

That means that the government can go out and borrow up to about a billion dollars on the back of the World Bank’s AAA rating from international banks,” Dr. Coomaraswamy said.

He noted that the borrowing on the policy guarantee would bring significant savings to the country.

The Finance Ministry is expected to seek the Cabinet approval to secure the policy guarantee from the World Bank.

However, the Central Bank officials noted that the process is likely to take several months.

In the meantime, the Central Bank is also continuing with its efforts to raise US $ 500 million through Panda and Samurai bonds.

The country has fulfilled 65 percent of its external debt repayments for this year.

The country’s external debt repayment for next year will be back loaded unlike this year, which was front-loaded. The first ISB maturity in 2020 falls in October. (NF)