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Sri Lanka raise $1 bn through domestic bond auction

AFP  |  Colombo 

today raised nearly a billion dollars through a domestic bond auction after the IMF asked the to build its foreign reserves amid increased capital outflows.

The Central of said the offer of USD 830 million was over subscribed by over one and a half times and it eventually accepted bids up to USD 973.25 million.

The bonds with tenures ranging from one to five years were taken at ranging from 254 to 411 basis points over and above the London-Inter Offered Rate, which is currently at 1.8 percent for one year.

The raised the dollar-denominated bonds through local financial institutions as the International Monetary Fund (IMF) warned that the country's foreign reserves were "below comfortable levels".

Official reserves improved slightly to USD 5.6 billion at the end of February, up from USD 5.4 billion a month earlier, but down from USD 6.0 billion at the end of 2016.

Last June, the received a USD 1.5 billion bailout from the IMF after facing a balance of payments crisis.

Earlier this month, the IMF said Sri Lanka's current account remained stable, but the financial account weakened with the resumption of capital outflows.

The IMF also warned that a prolonged drought in the island could raise food and oil imports with adverse impacts on economic growth, inflation, and the country's balance of payments.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 15 2017. 21:25 IST