Sri Lanka to raise over US$ 1 b from China with love
View(s):The Central Bank is set to raise US$ 250 million from the issuance of its maiden Panda (Renminbi) bond this year in an effort to boost foreign reserves, Central Bank Governor Dr. Indrajit Coomaraswamy told a media conference in Colombo on Friday.
The Panda bonds with a three year tenor, will be issued in the on-shore Chinese bond market with currency swap after a US dollar denominated international sovereign bond sale is wrapped up, he disclosed.
The People’s Bank of China has established a task force to assist Sri Lanka to issue the bond; he said adding that the issuance of the bond is very timely towards strengthening of the country’s credit profile.
He noted that the maiden issue of panda bonds affirms the country’s improving bilateral relations with China and the increasing relevance of the Renminbi.
Sri Lanka has organised a road show in China recently and it has attracted many banks and insurers, he revealed.
Sri Lanka will be raising another $ 1 billion through a syndicated loan from China Development Bank shortly.
The first tranche of $500 million is expected this month and the second $ 500 million by the end of October he added.
The IMF has already released its fourth tranche of $250 million of its extended fund facility, Dr. Coomaraswamy said pointing out that the country will be able to boost its foreign reserves by $1.5 billion through these measures.
China is considering Sri Lanka as its strategic partner and it has always helped the island nation as and when the country needs any assistance, he said pointing out that the issuance of Panda bonds would allow Sri Lanka to enter the Chinese capital market.
It is an investment opportunity for foreign investors looking at buying into the bonds from China, he revealed.
(BS)