Volatile bank interest rates hampering debt market - Fitch Ratings
 

by Hiran H.Senewiratne

The volatility of bank interest rates, is one of the hurdles to develop the country's debt market, Country Head of Fitch Ratings Lanka Ltd Alastair Corera said.

He said that with the current situation few corporate sector companies occasionally raise money through the primary and secondary market which is not a healthy situation for the improvement of the bond market.

It is said that very few large companies and certain banks are interested in Fitch Ratings,which majority of people do not have any idea to get rated in the bond markets, he said.

"What we need is to improve the country's secondary and primary market activities in the country, Corera said.

He said that banks in the country, driven through regulation, push to obtain them while there is no regulatory provision in the corporate sector to go for ratings. At present only a few corporates have obtained Fitch Ratings, most of being top corporates.

Corera said the company is in the process of working with various markets to improve activities in the corporate debt market.One of the ways is to identify and encourage the Corporate sector to raise money through the bond market. It also encourage banks to join the fray and many banks are now interested in obtaining the rating. However, we also closely monitor all recipients about their performance, he said.

Fitch Ratings Ltd is a joint venture between Fitch Ratings USA, International Finance Corporation, Central Bank of Sri Lanka and several other leading financial Institutes.

Fitch Ratings USA is one of the three global full service credit rating agencies and rates over 90 sovereign nations 8,500 structured finance ratings, 3,200 international banks and financial institutions and 1,300 corporates.