Central Bank Governor Dr. Indrajit Coomaraswamy noted that the government will soon issue Request for Proposals to raise $500 million via Samurai bonds, which will be used to boost reserves and finance debt repayment.

“We are about to call for RFPs for the $ 500 million Samurai bond. For that, the tender board has to be approved by the Cabinet, and it may take one or two weeks to get through all the administrative procedures before we call for RFPs,” Coomaraswamy said whilst addressing the Sri Lanka Forum of Junior Business Economists Economic Summit.

“This year we paid almost US $6 billion, next year over $5 billion, in the coming years it will be over $4 billion. And we have to raise about $3 billion or more fresh money every year going forward. And the market has to have enough confidence in us to give us this money,” Dr.  Coomaraswamy added.

Speaking further Governor pointed out that despite economic growth remaining low, the macroeconomic fundamentals have improved.

“Now we are an upper middle income country, we are exposed to rating agencies and to international capital markets. So we have to find a way of having a sustained way of maintaining sound macro-economic fundamentals.”

“Actually at the moment though growth is low, the macroeconomic fundamentals are not bad.” He added.

Speaking further Dr. Coomaraswamy noted that, inflation has been maintained at low single-digit levels of about 3.3% on average. However, because of the April event the current account deficit has now been revised to 2.6%, which is marginally higher than the original 2.3%.

The governor also insisted that Sri Lanka needs to get out of this “stop-go policy cycle’ in order to increase macroeconomic stability, so the economy can grow at a much faster pace.

Speaking further Dr.Coomaraswamy noted that Sri Lanka needs to maintain the Budget deficit at around 3% to 3.5% to control debt dynamics.

“We need to get the budget deficit down to about 3% to 3.5% .That level of budget deficit can be financed without the debt dynamics getting out of control. For that we need revenue of about 15% to 16% of GDP,” governor added.

“We have seen our debt grow, particularly, our external commercial borrowings. It sounds like we are entirely relying on foreign bond holders, bankers.. .this makes it more important that we maintain discipline so that markets have confidence in us,” Dr. Coomaraswamy added.

Speaking further governor noted that as far as the trade agreements are concern, clearly they have to be negotiated vigorously to pursue our national interest.

“I think Vietnam has got 20 trade agreements… Now if we are able to successfully conclude our trade negotiation with china and successfully conclude the deepening and widening of the existing agreement with India. Then we would be the only country in the world with preferential access with China, India and Europe under GSP+. No other country in the world can say that,” Dr.Coomaraswamy noted.