The government delayed its International Bond Issue since it wanted to pass on the entire benefits of the government’s borrowings to the people of Sri Lanka and that it issued international bonds recently since the time was ripe, said Governor of the Central Bank Arjun Mahendran.

While commenting at a media briefing in Colombo recently, Governor Mahendran said the government recently continued local bond issues for it borrowings since it wanted to develop local bond market.

However, the government recently issued international sovereign bonds and development bonds and borrowed USD 988 million on a weighted average cost of 5.2 per cent.

This is the best time to go for an international bond issue since the US Central Bank is expected to raise interest rates in the near future. That is why this international bond issue was carried out, added the Central Bank Governor.

This time the interest rates are higher than during the international bond issued by Sri Lanka in 2012 since the US interest rates have increased and it has increased by around 2.2 per cent since 2012, said Arjun Mahendran.

However, the extra 4.4 per cent risk interest rate which Sri Lanka had to pay in 2012 has this time been reduced to 3.9 per cent, said the Governor.

Interest high this time, says Bandula

However, Member of Parliament and former Minister Bandula Gunawardene has said that the interest rates for the international bond issue are high and hence is very disadvantageous to the country.