Nov 29, 2011 (LBO) – Several Sri Lankan lenders will visit Oman and Qatar in December as part of plans to encourage banks to borrow abroad, Deputy Governor Dharma Dheerasinghe said. To encourage banks in the initial stages the Central Bank will also give some comfort through a swap contract to mitigate foreign exchange risk.
“We are willing to give a swap of up to one year, subject to review it can be extended,” Dheerasinghe said.
Dheerasinge said short term swaps would also be offered to banks who wanted to convert their dollars.
Dheerasinghe said banks will meet investors and state investment funds in Oman and Qatar.
He said larger Sri Lanka banks could raise around 250 million dollars abroad and smaller banks around 100 million dollars.
The Central Bank has urged banks to borrow abroad after the sovereign bonds set benchmark interest rates as part of long term plans to make more capital available to the country for investment.