By Zacki Jabbar
Cabinet spokesman and Media Minister Keheliya Rambukwalle addressing yesterday’s cabinet press briefing in Colombo,said that the cabinet of ministers on a proposal by President Mahinda Rajapaksa in his capacity as Finance Minister,approved the issue of the sovereign bonds in the international capital market under the supervision of the Central Bank.
"We have taken short term loans at high interest rates.The issue of US$1,000 million sovereign bonds is the way out of the present situation. It will help retire high cost short term debt and maintain interest rate stability."
He said that the Monetary Board having assesed the borrowing needs, resource availability and implication of the borrowing programme on the domestic interest rate structure,was agreeable to the issuance of international sovereign bonds upto the value of US$ 1000 million.
"Total gross borrowings until the end of June 2010 amounts to Rs.389 billion. A sum of upto Rs.591 billion can be borrowed during this year,without exceeding the statutory borrowing limit." he said. "The Appropriation Act No 7 of 2010,has authorized a gross domestic and foreign borrowings limit of Rs. 980 billion for 2010.It consists of Rs. 456 billion for repayment of loans and Rs. 524 billion to meet other financing needs including domestically financed capital projects."
Under the proposed mechanism the Monetary Board was empowered to set principles and standards to the regulators of Micro Finance Institutions.Accordingly the Cabinet decided to instruct the Legal Draftsmen to draft a Microfinance Act and present it for parliamentary approval,Rambukwalle said.
The funding needs for the first two years of the proposed Micro Finance Regulatory and Supervisory Authority,he said would total approximately Rs. 400 million. Rs. 225 million for the first year and Rs. 174.2 million for the second year.
source - www.island.lk
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