While the Stock Market of Sri Lanka is one of the best performing markets of this year, all of the country’s bond-auctions have fully been subscribed and the interest rates are moderated, said Governor of the Central Bank of Sri Lanka (CBSL) Ajith Nivard Cabraal yesterday (18) commenting on the investor confidence as opposed to the International Monetary Fund (IMF) approach suggested by many parties amidst the ongoing economic crisis.
Speaking to “Bloomberg Markets: Asia,” the CBSL Governor discussed the country’s efforts to avoid a debt default, the outlook for the economy and monetary policy. Most holders of the country’s development bonds maturing in February have agreed to re-invest after being repaid, Cabraal revealed.
Looking at Sri Lanka’s Gross Domestic Product (GDP), Tourism and general conditions of the Banking Sector, they are in good shape promising investor confidence catering to a fairly stable economic condition in the country, the CBSL Chief emphasised.
Nevertheless, Sri Lanka will be having certain changes in economy, particularly in the fuel prices, he added.
Non-debt inflows would be the key to stabilise economy, particularly on the securitisation of Sri Lanka’s remittances, and the sale of certain underutilised assets, which are now on track, Cabraal pointed out.
Sri Lanka’s foreign exchange reserves fell 25% last month, after repaying a $500 million bond on Jan. 18 that helped ease worries of an immediate default. Since the CBSL’s roadmap was announced, Sri Lanka’s overall reserves have been buttressed by several swap arrangements between foreign states like India, China and Bangladesh and those have been helpful in dealing with the current situation, he noted.