CB says has “substantial liquidity” to service debt

The Central Bank of Sri Lanka (CBSL) yesterday hit back at the erroneous media reports, which had said that the CBSL lacks funds to pay off the treasury bonds before their 
date of maturity.

“The CBSL notes that there is no accuracy in the above media reports and highlights the unblemished debt service payment record of the government in servicing both domestic and foreign debt,” the CBSL said in a press release.

It added that the payment of interest and principal at maturity on due dates and not before the due date is followed to the rule by the CBSL in discharging its agency function of managing public debt on behalf of the government.

The CBSL said that the government has “substantial liquidity” available to service its debt liabilities and has so far in 2018 made total payments of Rs.324.4 billion for treasury bond maturity and interest payments, while the government has raised only Rs.222 billion by issuing treasury bonds.

“The CBSL holdings of treasury bills as at 25.04.2018 also declined substantially to Rs.69,114 million from Rs.293,039 million, as at 25.04.2017,” the CBSL said.

The media reports making contradictory statements were quoting the opposition member MP Bandula Gunawardena.

He was quoted as saying that the bond market could collapse due to the situation and that he was making the statement with responsibility.