International Sovereign Bonds: JVP demands explanation

Janatha Vimukthi Peramuna (JVP) Leader Anura Kumara Dissanayake today insisted that the Finance Minister and State Finance Minister should explain to Parliament how the Central Bank had gone for an International Sovereign Bond (ISB) issue at a far higher interest rate than other countries in the region and beyond. 

By Sandun Jayawardana

Speaking during the debate on the Budget's Second Reading, Mr Dissanayake revealed that the Central Bank had recently issued a 5-year ISB of USD 1 Billion at the interest rate of 6.85% and a 10-year ISB of USD 1.4 billion at an interest rate of 7.81%. 

This is in marked contrast to similar recent ISBs of other countries in the region and beyond, including Vietnam (4.78%), Thailand (2.51%) and Greece (3.84%).

The JVP Leader questioned as to how come Sri Lanka issued ISBs at such a high interest rate when even Greece, which was on the verge of collapse due to a financial crisis, had issued them at a much lower interest rate. 

"It is the people of this country who have to bear the burden of this. They are the ones who will be paying. There are now suspicious transactions even when obtaining loans. The Finance Minister and State Finance Minister owes this Parliament an explanation as to why ISBs were issued at such a high interest rate," he stressed.