MoF await amendments to Appropriation Bill
The Ministry of Finance (MoF) is awaiting the amendments to the Appropriation Bill in the Appropriation Act to effect part of the Domestic Debt Organisation (DDO) requirements.
The DDO proposal seeks rescheduling of debt, extensions on repayment times, and reduced interest on Sri Lankan government debt, including those held by pension funds. It will exchange Treasury bonds of superannuation pension funds for longer-maturity Treasury bonds from 2027 to 2038, with a step-down coupon structure of 12 per cent until 2025 and 9 per cent until maturity.
The Appropriation Bill in the Appropriation Act will be amended to enhance the government borrowing limit from Rs. 5 trillion to Rs 14 trillion for repurchasing/exchanging Rs. 9 trillion bonds and to settle the existing T-bills as proposed in the DDO. “The bill should be passed by Parliament before August 11. As much as 97 per cent of the total outstanding creditors of Sri Lanka Development Bonds accepted the proposal to settle the bond. The interest up to August 15 will be paid in cash,” a Finance Ministry official told The Business Times.
Currently, there is Rs. 4.1 trillion in Treasury bills, with 62.4 per cent held by the Central Bank.
There are Rs. 8.7 trillion in Treasury bonds, with 36.5 per cent held by the superannuation fund and approximately 36 per cent held by banks. Insurance companies and private individuals own the remaining portion.
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