Central Bank rejects Bandula’s claim on lack of funds to pay off T-bonds

Apr 25, 2018 (LBO) – Central Bank on Wednesday rejected the claim made by Parliamentarian Bandula Gunawardane on lack of funds the bank has to pay-off bonds. Gunawardane recently told media the government needs to pay back the funds of the Treasury bonds and bills before the date of termination but they were short of funds.

"CBSL notes that there is no accuracy in above reports and highlights the unblemished debt service payment record of the government in servicing both domestic and foreign debt,” Central Bank said. “The payment of interest and principal at maturity on due dates and not before the due date is followed to the rule by CBSL in discharging its agency function of managing public debt on behalf of the government.” Central Bank said coupon and maturity payments for Treasury bonds so far during 2018 amounting to 324,448 million rupees compared to only 222,020 million rupees raised by issuing Treasury bonds. During the same period, Central Bank’s holdings of Treasury bills as at today have declined substantially to 69,114 million rupees from 293,039 million rupees.

Central Bank, however, said that payments made to few beneficial owners with respect to interest and maturity payments of Treasury bills and bonds would be released in due course with appropriate legal clearance. Central Bank further said those payments are held in an account of a primary dealer whose account is frozen due to ongoing legal proceedings.