ISSN: 1391 - 0531
Sunday, January 28, 2007
Vol. 41 - No 35
Financial Times  

Govt. to raise Rs. 20 bln from treasury bond sales

The government plans to raise approximately Rs. 20 billion in foreign currency this year through the sale of treasury bonds to foreign investors, the Central Bank said. At the end of 2006, the government opened the rupee-denominated Treasury bond market to foreign investors in foreign currency.

Thus foreign investors including foreign country funds, mutual funds or regional funds approved by the Securities and Exchange Commission (SEC) of Sri Lanka, corporate bodies incorporated outside Sri Lanka and citizens of foreign states are eligible to make investments up to 5% of the outstanding Treasury Bonds.

Through this exercise, the government has targeted to raise approximately Rs. 20 billion in foreign currency during 2007. The Central Bank said it had also relaxed entry barriers to the government securities market by removing the previously announced minimum holding period of one year as well as the minimum maturity period of two years. In addition, new measures will be taken to ensure a smooth exit mechanism for foreign investors.

In response, overseas clients of Citibank N.A. and Hong Kong and Shanghai Banking Corporation Ltd. (HSBC) have, by January 18, 2007, invested Rs. 230 million in Treasury bonds in foreign currency. “This development is considered a positive start and paves the way to achieving the expected target for the year,” a bank statement said.

 

 
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