Feb 08, 2018

Problematic situation crops up in calculating Sri Lanka’s debt Featured

A problematic situation has arisen when calculating the debt due to not reporting of the loans obtained outside the Department of External Resources and from various other institutions.

When inquired whether foreign loans can be obtained outside of this department and from various other institutions, an official of the Ministry of National Policies and Economic Affairs in reply said direct loans can be obtained on the guarantees of the Treasury Operations Department.

Information regarding these loans is not with the Department of External Resources which is defunct at present.

In addition he said the investments made by foreign investors in treasury bonds should be considered as foreign loans. Furthermore he also stated that discussions are underway to bring the data regarding these loans under a single institution and this institution is now being functioning at the newly established Department of Foreign Exchange in the Central Bank of Sri Lanka.

This department was established under Sri Lanka’s new Foreign Exchange Act No 12 of 2017.

The new act covers matters including classes of capital transactions, opening and maintenance of accounts, permitted investments and granting of loans and advances.

It also has provisions for capital transactions undertaken outside Sri Lanka by persons resident in Sri Lanka and capital transactions undertaken in Sri Lanka by person’s resident outside Sri Lanka.