The Sri Lankan government hopes to raise a record USD 5 billion through bond issues this year as it seeks to repay its substantial debts and finance development projects.
The cabinet of ministers has approved a proposal put forward by the Minister of Finance and Mass Media Mangala Samaraweera to raise up to USD 2 billion through issuing International Sovereign Bonds within the approved borrowing limit under Public Borrowing Program for 2018.
The cabinet also approved a proposal by the Finance Minister to raise another USD 3 billion (approximately Rs. 456 billion) through the issuance of Sri Lanka Development Bonds in 2018 and to issue the bonds under the supervision of the Central Bank of Sri Lanka.
According to the Appropriations Act No. 30 of 2017 the maximum government borrowing limit is Rs. 1,893 billion.
Of this amount, Rs 1,150 billion is to be paid as debt payments, and Rs. 743 billion will be used for development projects and other expenses.
The government expects to obtain Rs. 1,313 billion of the borrowing limit from domestic debt sources and Rs. 580 billion from foreign debt sources.
The loans from local sources will be obtained through debt instruments such as Treasury bonds and Sri Lanka Development Bonds.
Last year the government raised USD 3.73 billion through dollar-denominated bonds. It secured a USD 1.5 billion bailout from the International Monetary Fund in June 2016 following a balance of payments crisis.