SL records US $ 537 mn FDIs in first half

19 August 2013 03:16 am Views - 2902

Central Bank said the country has received US $ 537 million worth Foreign Direct Investments (FDIs) in the first half of 2013.

Sri Lanka has set a FDI target of US $ 2 billion for 2013. In 2012, Sri Lanka received US $ 1.34 billion in FDIs, falling short from a target of US $ 1.5 billion.

Meanwhile, net inflows to the stock market and commercial banks in the first half stood at US $120.2 million and US $ 664.3 million respectively. Net inflows to the government securities market amounted to US $ 664.4 million.

“Such inflows display that the foreign investor confidence on Sri Lanka has remained unchanged despite the volatility caused by global markets reacting to the prospects of the tapering of quantitative easing by advanced economies,” the Central Bank said.

Meanwhile the Central Bank Governor, Ajith Nivard Cabraal said during a recent forum that even if the country missed the target, it wouldn’t matter much.

“Even if we miss it, it doesn’t matter. “We have had large FDIs. I know many people talk of FDIs not being sufficient. Yes, we are never satisfied. We don’t want to be satisfied ever.

“At the same time, if you go back and see, those numbers are not so bad. And we don’t want it to be too much also because it sometimes becomes more difficult for the Central Bank and the government to manage them, when it’s too big”, he said.

He further said that some people mistakenly consider FDI as the only instrument that Sri Lanka uses to attract foreign savings to the country.

“They think only FDI as real investments. While investments could come as FDIs, they can also come in the form of infusions of capital into the government securities market, corporate bond market and equity market.”

“So through all these, we have been able to bridge our savings-investment gap,” Cabraal assured.

Sri Lanka targets FDIs to be at least 2 percent of GDP for the next 4 to 5 years.