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Sri Lanka to repay US$6,865mn foreign debt in 2021: Minister

Sri Lanka is making arrangements to repay or roll-over 6,865 million dollars of foreign debt in 2021 co-cabinet spokesman Minister Udaya Gammanpila said.

He said principle repayments were 5,351 million dollars and interest was 1,514 million dollars, according to information provided by Prime Minister and Finance Minister Mahinda Rajapaksa to the cabinet.

He said a similar 6.8 billion dollar volume was also owed in 2020 and had been repaid.

Sri Lanka has borrowed in dollars from multi-lateral agencies, foreign government, export import banks and bond markets.

A billion US dollars sovereign bond is due in July. In 2020, a billion dollar bond was repaid as bond yields rose sharply.

“Though there are challenges in foreign exchange we are making the program to pay the debt on time, as required the 6.865 billion dollars,” he said.

Sri Lanka also borrows domestically in dollars through Sri Lanka Development Bonds, and from the foreign currency banking units of banks. In 2021 at least 364 million dollars of SLDBs are due to mature. Some SLDB auctions were under-subscribed this year.

Last year about 2.3 billion US dollars of debt was rolled over, he said.

“We encourage investors to roll over their investments as much as possible. If they do so it will be a great relief for the government,” he said.

He said the government had taken a policy decision not to borrow abroad for large infrastructure projects in the future.

Instead public private partnerships in the form of Build Operate Own and Transfer will be used.

Government will also borrow more domestically and reduce reliance on foreign debt.

Under the Appropriation Act the Parliament approved a borrowing limit of 2,997 billion rupees.

The government planned to borrow 1,257 billion rupees domestically and 606 billion rupees from foreign sources, Gammanpila said.

Author: TELO Admin