Sri Lanka’s foreign reserves moving towards USD 9 bn: Ravi Karunanayake

May 29, 2015 (LBO) – Sri Lanka’s government plans to increase the Island’s foreign reserves to 9 billion US dollars, Finance Minister Ravi Karunanayake said.

Sri Lanka’s foreign reserves would be close to 8.3 billion US dollars after proceeds from a 988 million dollar sovereign bond and development bond injection to the economy.

“That is the highest ever,” Karunanayake said.

“When Mahinda Rajapakse and Nivard Cabraal ran the economy and handed it to us, in 150 days we have managed to transform that and be able to increase our reserves, at a genuine value added basis not on the basis of you take this and that and show hocus pocus development,”

“We are also trying to push further, so that we can get to the 9 billion rate and ensure that we give the people what they deserve.”

By end May Sri Lanka had 7.2 billion to 7.3 billion dollars of foreign reserves, Karunanayake said.

The Central Bank issued 650 million US dollar, 10-year international sovereign bond at a yield of 6.125 per cent per annum yesterday and also issued 329 million US dollar of Sri Lanka development bonds of 1 year 1 month maturity at a Weighted Average Margin (WAM) of 316.69 bps and 9 million US dollars of SLDBs of 2 years 11 months maturity at a WAM of 353.89 bps, over 6 month London Interbank Offered Rate (LIBOR).

Accordingly, a total of 988 million US dollars was raised via international sovereign bonds and SLDBs at a weighted average cost of 5.261 per cent per annum.

Sri Lanka’s official reserves are projected to strengthen further with the proceeds pending from the currency swap arrangement between Sri Lanka and India and other identified regular investment inflows to a level of official reserves comfortable for supporting the exchange rate stability in the immediate future, the regulator said in an earlier press release.

(To be Updated)