Friday July 9, 2021 9:45 am
Friday July 9, 2021 9:45 am
ECONOMYNEXT – Sri Lanka has allowed domestic firms to borrow and invest in international sovereign bonds which are going at a discount after sovereign downgrades and balance of payments crisis triggered by liquidity injections.
Domestic firms can buy ISBs by borrowing abroad or bringing in funds from abroad and placing half of them in dollar-denominated government bonds called Sri Lanka Development Bonds.
“Repayment schedule of interest and capital of the said foreign currency borrowings shall be (as agreed between the resident borrower and the foreign lender) matched against the receipt of coupons and maturity proceeds of the corresponding investments in ISBs and SLDBs,” the central bank said.
Local Companies Permitted to Invest in the International Sovereign Bonds in the Secondary Market - Adaderana Biz English
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New exchange control regulations on top of import controls
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Suspensions and restrictions on outward remittances announced by CBSL
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With a view to assist and maintain the financial system stability by minimizing the pressure on the exchange rate and preserving the foreign currency reserve position of Sri Lanka, the Finance Minister with the recommendation of the Monetary Board of the Central Bank and the approval of the Cabinet has issued an Order under Section 22 of the Foreign Exchange Act. Accordingly, the following suspensions/restrictions on outward remittances will be effective for six (06) months commencing from 2 July 2021.
i. Suspend the repatriation of funds under the migration allowance out of funds received as monetary gifts by an emigrant from an immediate family member (i.e. parents, grandparents, siblings and spouse of the Emigrant).