The Securities and Exchange Commission (SEC) plans to propose to the government an avenue facilitating easy access to the public to purchase treasury bills (TBs) through the Colombo Stock Exchange (CSE), a SEC official said.
"This will be like a 'tap' where the Central Bank (CB) can directly send TBs to the CSE," Channa de Silva, Director General SEC told The Sunday Times FT. He said, TBs will not be listed in the CSE, but the 'tap' will be opened through an intermediary, linking CB and CSE to help the public to purchase TBs at a competitive rate.
He explained that banks are raising deposits at 10% interest while the government finds it difficult to mobilize money at 18% per annum. "This is due to the weaknesses in the current distribution channels to raise funds. TBs are virtually non existent in the household market. If this mechanism to popularise TBs is done effectively, the government's cost of borrowing in the short to medium term can be reduced by two to three percent," he added. Mr. De Silva noted that finding the intermediary is what SEC is currently working on. He said the government can also raise finance at a very competitive rate if this recommendation comes through. |
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