Local security bond market:

Foreign investment exceeds Rs 150b

Uditha Kumarasinghe and Irangika Range

Minister Siyambalapitiya

Finance and State Revenue Minister Ranjith Siyambalapitiya told Parliament yesterday that the foreign investments in the local security bonds market has exceeded over Rs. 150 billion paving the way for increased competition and lower interest rates in the market.

He said 150 foreigners and over 65,000 locals have invested in the Government security bonds.

This increase has resulted in increased competition and gradual reduction of interest rates. The significant feature, he said was that the foreign investors were compelled to invest in the Government security bond market even when the interest rates have gone down by 10-13 percent.

The Minister was responding to a special statement made by UNP MP Joseph Michael Perera.

The Minister said it shows they have confidence in the country.

The fluctuation of interest rates in the security bonds market directly affect both local and foreign investors.

Foreign investors take a bigger risk when they invest in the security bonds due to fluctuations of interest rates. "But, even in this risky situation, both local and foreign investors today have come forward to invest in Sri Lanka, further their confidence and trust in the country.

With the increase of foreign investments, the payments of interest have gone down due to the low interest rate.

This situation will positively improve the budgetary activities in the country. Furthermore, a number of foreign investments has also led to stabilizing the local market as well as foreign exchange market enabling the country to march towards economic growth.