NDB, DFCC aim to borrow $500 million
View(s):National Development Bank and DFCC Bank are planning to raise US $250 million each in foreign borrowings with the foreign exchange risk to be borne by the Treasury, a senior Finance Ministry official said
A decision has been taken by the government to absorb the foreign exchange risk exposure of commercial banks.
In the last budget, commercial banks were allowed to borrow from overseas subject to certain limitations. The National Savings Bank recently borrowed US$750 million from a bond issue.
Other commercial banks are also considering foreign loans.
Meanwhile official sources said that Sri Lanka is aiming for 7.5 per cent economic growth and a reduced budget deficit of 5.8 percent in the budget, by raising import tariffs to protect local industries and increasing direct and indirect taxes tightening tax collection.
One source involved in budget preparations said bridging the budget deficit target to 5.8 per cent of the gross domestic product in 2014 from 6.2 per cent in 2013 was not an easy task as revenue collection has not been up to expectations.
“Generating a revenue surplus in a magnitude of around 2 per cent of GDP through an enhanced revenue effort is a major component of government strategy,” he revealed.
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