Sri Lanka’s Central Bank (CB) has vigorously denied reports that it was short of cash to pay for huge debts this year.
“The CB has observed media reports erroneously highlighting lack of funds to pay-off Treasury bonds before their date of maturity,” the banking regulator said in a media release on Wednesday.
The reports were based on comments made by Opposition Parliamentarian Bandula Gunawardene at a media conference on Tuesday.
The bank said that the coupon and maturity payments for Treasury bonds so far during 2018 amounted to Rs. 324,448 million as against Rs. 222,020 million raised by issuing Treasury bonds.
It said the bank has an unblemished debt service payment record of the government in servicing both domestic and foreign debt. The payment of interest and principal at maturity on due dates (timely payment) and not before the due date is followed to the rule by CB in discharging its agency function of managing public debt on behalf of the government.
The availability of funds to pay maturity (including the interest component) for Treasury bills and coupon and maturity for Treasury bonds in 2018 also highlights the substantial liquidity available with the government in servicing its debt liabilities, the release said.
“The CB also clarifies that payments made to few beneficial owners with respect to interest and maturity payments of Treasury bills and Treasury bonds but held in an account of a primary dealer whose account is frozen due to legal proceedings would be released in due course with appropriate legal clearance,” it said, in a reference to the funds of controversial Perpetual Treasuries being frozen. -ENDS -
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