Govt. and CB eye US$ 10bn fresh inflows over next six months
„G2G and bilateral loans, Central Bank swaps make majority of expected inflows „Expect foreign holding in rupeedenominated govt. securities market to go up to US$ 1bn from current US$ 9mn „Gross official reserves to be enhanced to cover minimum of 4 mon
The government and Central Bank (CB) expect nearly US$10 billion in fresh foreign exchange outflows over the next six months to build the country’s foreign reserves to a comfortable level.
Unveiling ‘The Six-month Road Map for Ensuring Macroeconomic and Financial System Stability’ last Friday, CB Governor, Ajith Nivard Cabraal revealed that the government and the CB expect US$ 6.25 billion and US$3.4 billion in fresh inflows over the next six months.
In addition, the government also expects to rollover US$ 950 million worth loans with off-shore banking units during the period.
Cabraal also noted that the government would consider the possibility of buying back the entire issue of the country’s International Sovereign Bonds (ISB) maturing in January 2022 and/ or July 2022, if high discounts are prevalent in the market.
In the upcoming six months, the government plans to raise US$ 1.5 billion in bilateral loans, US$ 700 million in multilateral loans, US$ 300 million in syndicated loans, US$ 1 billion in Sri Lanka Development Bond (SLDB) parcels, US$ 1 billion from monetization of under-utilised State-owned assets and US$ 300 million from foreign direct investments (excluding Port City investments).
In addition, Cabraal expects the foreign holding in rupeedenominated government security market to rise substantially to US$ 1 billion from the current US$ 9 million over the period.
Meanwhile, the CB expects raise US$ 1.5 billion from swaps with other central banks, US$ 1 billion from domestic short/long-term swaps and US$ 400 million from purchasing of remittances/ export proceeds.
However, the CB also plans to sell US$ 900 million foreign exchange to facilitate fuel/essential imports during the period.
Accordingly, Cabraal expects the country’s gross official reserves to be enhanced to cover a minimum of 4 months worth imports over the six-month period.