Sri Lanka hits road to raise US$ 200 mn from overseas investors this year: Central Bank

President of the Sri Lanka Automotive Component Manufacturers’ Association Dimantha Jayawardena

January 22, 2007 (LBO) – Top Central Bank officials will hit the road next month to drum up overseas investor support to raise 200 million dollars in government bonds this year, officials said Monday. The bank’s Assistant Governor, Y M W B Weerasekera is due to fly off to Singapore and Hong Kong early next month, to sound out investor appetite.

In an effort to infuse more liquidity into the market, monetary authorities partially liberalized the capital account last November, giving overseas portfolio investors a chance to buy up to five percent of Sri Lankan treasury bonds.

Overseas investors are now allowed to buy government bonds carrying tenures of two years and above.

Since relaxing investment rules, Central Bank Governor Nivard Cabraal said foreign commercial banks such as Citibank and HSBC Ltd have found buyers to invest 230 million rupees or 2.13 million dollars in bonds, last week.

Overseas portfolio investors could earlier invest in either dollar denominated bonds issued by the government also known as Sri Lanka Development Bonds or invest in shares of companies quoted on the Colombo Stock Exchange. Sri Lanka’s total outstanding debt had climbed to 1.15 trillion rupees as at end 2006, of which treasury bonds accounted for 901.3 billion rupees, according to central bank figures.