"Funds will be raised through commercial banks this month," he said.
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Quitting Notice Sri Lanka’s Central Bank governor Sunil Mendis is quitting a year ahead of schedule amid some frictions and serious differences of opinion over the bank’s independence or the lack of it. Governor Mendis told LBO that there were no differences of opinion and that his decision to quit at the end of the month was on personal grounds. “I took this office for three years, but leaving after two years.. I’ve had excellent relationships with the treasury secretary, the president and my senior staff.†A Central Bank governor’s term usually lasts six years. |
His comments come as the Sri Lankan rupee fell to a recent low of 103.38 against the U.S. dollar in early morning trade, as the Central Bank governor's sudden resignation filtered into the markets.
Wijewardene expects the rupee to bounce back to 103.00 levels against the greenback.
"There is no foreign exchange difficulty in the country now," he said.
SLDBs were last issued in 2004, with the government raising 250 million dollars via local banks. Development bonds were first issued in June 2002, to raise 250 million dollars mainly for deficit financing.
Currently 144.75 million dollars are schedule to mature on June 28, while 50.00 million dollars will mature on August 18, and 55.25 million dollars expire on September 9 this year, according to Central Bank figures.
The upcoming issue will replace debt maturing this year and include a new paper worth 100.00 million dollars.
The proceeds will help ease the country's rupee debt stock and prop up gross official reserves, which currently stand at 3.00 billion dollars, in April.
Sri Lanka has successfully raised smaller dollar denominated debt in the international markets without a rating.
Sri Lanka's sovereign debt currently carries a speculative or junk bond rating from two international agencies - Fitch Inc and Standards & Poor's.
A junk-grade rating denotes concerns that borrowers may not always be able to honour debts in full or on time.
In April, Fitch and Standard & Poor's cut Sri Lanka's credit outlook to negative from stable, reflecting the island's worsening security situation.
"The Negative Outlook reflects a further deterioration in the security situation in recent days, which has provoked official retaliation for the first time since a ceasefire agreement was put in place in 2002," says Paul Rawkins, Senior Director in Fitch's sovereign team.
Both agencies said there was no change in the country's credit rating, which currently stands at 'junk' or 'below investment grade'. Fitch assigned a 'BB-', while S&P gave it a 'B+'.
Credit ratings are used by fund managers to determine investment risk and the amount of interest payments they demand.
Besides this fresh issue, the government is also trying to sell 250 million dollars in patriotic bonds to expatriate Sri Lankans.
Response to the first tranche of 25 million dollars, which kicked off in March, has been poor indicating Sri Lankans are not quite patriotic as the government would like them to be.
Treasury secretary P B Jayasundara said earlier this year that the government was also looking at selling up to a billion dollars in bonds maturing in seven to 10 years in the first half of 2006. Citigroup Inc has already secured the mandate to manage the bond sale.