May 29, 2015 (LBO) – Sri Lanka’s Central Bank Governor, Arjuna Mahendran says the local bond auction carried on a transparency manner and it sends positive signals to the business community around the world to invest in the Indian Ocean Island.
“We wanted to develop our local bond market. We wanted to see the Sri Lankan gets the full benefit,” Mahendran said at a press briefing held at Colombo, Friday.
“That is why I opened up the bond auction on Feb this year and subsequently we have raised record amount of money,”
“In the rupee market, Sri Lanka has raised money more than 100 billion rupees through our bond market,”
“By moving to an auction system we have signals to Sri Lankans and to the rest of the world that Sri Lanka is opened for business,”
“This is not a place for private placements and private backroom deals.”
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 the Island raised 988 million US dollars via international sovereign bonds and Sri Lanka development bonds at a weighted average cost of 5.261 per cent per annum.
In 2012, Sri Lanka sold 10-year bonds to yield 5.875 percent, above similar tenor US Treasuries, but raised a higher volume of a billion US dollars.
buy xifaxan online buy xifaxan online no prescription
In replying to a question of a journalist present, about the high paying back interest rate, the governor said,
“The interest rate is based on US treasury interest rate which has gone up,” Mahendran said.
“What has happened is, our bond is priced of that, so because that bond has gone up in the rate, our rate has also has gone up.”
”The interest rates all over the world has gone up and it is not only for Sri Lanka,”
“What you must look in to is the interest rate spread, that has come down and that is a great achievement.”
He said, the country didn’t needed to raise the money through an international sovereign bond, because the regulator has raised enough money through the local bond auction.
“We tap in to that, because we expects the US interest rates would go up in the near future, so before the interest rate move up further, we thought that we will lock in some dollars at this point of time.”