Lanka to raise US$ 200m from foreigners

COLOMBO: Sri Lanka hopes to raise US$ 200 million by selling Government bonds to overseas portfolio investors this year to help fund a sharp jump in the budget, the Central Bank Chief said yesterday.

The Central Bank partially liberalised foreign currency investment rules in November to allow funds to buy up to five percent of Sri Lanka Government bonds outstanding in the market in an effort to bring more liquidity into the market.

The benchmark five-year Government bond currently yields 13.85 per cent in Sri Lanka. Since liberalising debt investment rules, commercial overseas banks such as Citibank and Hong Kong and Shanghai Banking Corp have invested 230 million rupees (2.13 million dollars) in bonds, Central Bank Governor Ajith Nivard Cabraal said.

Earlier, overseas portfolio investors were limited to shares in firms listed on the Colombo Stock Exchange and dollar-denominated bonds issued by the government also known as Sri Lanka Development Bonds.