Sri Lanka is to receive over USD 2.65 billion foreign receipts in the next three months, said State Minister of Finance and Capital Market Development, Ajith Nivard Cabraal.
In an interview with ‘CNBC Street Signs Programme’ he said that these would come via currency swap, IMF and other methods. “We are expecting USD 780 million by the end of August, through the International Monetary Fund’s (IMF) new Special Drawing Rights (SDR) proposal.”
In addition SWAP facilities too would help to boost up foreign reserves, he said. These include USD 400 million from the SAARC Finance SWAP facility from the Reserve Bank of India in August 2021, USD 250 million from the Bangladesh Bank in July and also from China. “In addition a special SWAP facility of USD 1,000 million is being negotiated with India.”
Cabraal said that it’s to strengthen the foreign reserves that some import restrictions were imposed while exporters were egged on.
He said that one of the major areas that bring in foreign exchange of around USD 4.3 billion is tourism but it has dried up. “However we see this slowing, picking up and to give confidence to both tourists and local stakeholders we gave priority to the tourism sector when administering COVID-19 vaccination process.”
The Government spent several billions of rupees for the importation of the vaccines and today 95% of the population that need it has got the first jab.
He also said that over USD 400 million will come Sri Lanka way in the coming few months by utilizing unutilized assets.
Asked to comment on the debt repayment he said that Sri Lanka settled USD 1 billion ISB that matured on July 27 this year and the outstanding foreign debt repayment for the year stands at USD 2.4 billion.
A total of about USD 29 billion in foreign-currency debt obligations are due between now and 2026.
“We have never defaulted on debt and these too would be honored on time,” he assured. The general government deficit widened to 11.1% of GDP in 2020, from 9.6% in 2019, as the economic contraction led to a sharp fall in fiscal revenue.
Asked by CNCE why Cabraal was so confident while Analysts are not, he replied that these same analysts said that the government would not be in a position to honor debt in 2020 but they were proved wrong. (SS)