Govt. permits foreign investment in T-bills

The government this week decided to permit foreign investments in Rupee-denominated Treasury bill market. The Central Bank said this will not increase the government’s overall borrowing limit approved by the Parliament with the Budget 2008. Earlier in November 2006 foreign investors were allowed to invest in Treasury bonds.

Foreign institutional investors such as foreign country funds, mutual funds and regional funds, corporate bodies incorporated outside Sri Lanka and citizens of foreign states are now permitted to invest in Treasury bills, the Bank said. “Foreign investors have to advise a bank in their own country to open a special Rupee account, i.e. Treasury Bill Investment External Rupee Account - 2 (TIERA-2) in an LCB in Sri Lanka.

Foreign exchange brought into the country for the purchase of Treasury bills and all proceeds received by sale or transfer or maturity of Treasury bills are routed through TIERA-2 which is free from exchange control,” the statement said.