In the first eight months of this year: Govt’s Debt Burden Increased By Rs 01T

CEYLON TODAY | Published: 2:00 AM Nov 24 2020

The Government has borrowed (gross) over 1.4 trillion rupees in the first eight months of this year, according to the latest reports from the Finance Ministry.

Of this, foreign debt is 269.9 billion rupees and domestic debt is one trillion rupees.

The Ministry of Finance states that these loans were obtained to finance cash flow operations and development projects during the period.

As of 30 August this year, the total external debt of the government was US $ 35.3 billion.

Total debt service payments from 1 January to 31 August 2020 amounted to US$ 2,292.7 million, of which, US$ 1,348.6 million was in lieu of principal repayments and the balance US$ 944.1 million for the payment of interest.

According to report approximately 74 per cent of domestic borrowing consisted of long-term borrowing in the first eight months of 2020. Treasury Bonds, Treasury Bills, Sri Lanka Development Bonds and Foreign Currency Banking Units (FCBUs) were the main sources of domestic borrowings of the Government. 

Accordingly, around 67 per cent of the total domestic borrowings were raised by way of Treasury Bonds, while 21 per cent represent the Treasury Bills, seven per cent Sri Lanka Development Bonds and another five per cent was raised by way of FCBUs in the first eight months of 2020. 

In addition, proceeds from the Syndicate Loan issued in the first quarter of 2020 were utilised to finance the foreign currency debt service payments. 

The net borrowing as at end of August 2020 was Rs 739.5 billion.

The Government has made arrangements to mobilise foreign financing of US$ 742.8 million by entering into 11 agreements with foreign development partners and lending agencies from 1 January to 31 August 2020, to support the public investment programme. This consists of US$ 500 million in Foreign Currency Term Financing Facility extended by the China Development Bank for Budget support purposes and US$ 128.6 million extended by the World Bank to be utilised for COVID-19 Emergency Response and Health Systems Preparedness project plus grants extended by Japan (US$ 7.6 million), Germany (US$ 12.5 million), the Asian Development Bank (US$ 3.0 million) and the United Nations High Commissioner for Refugees (US$ 0.02 million). The performance of mobilising foreign financing during the period was adversely affected by the COVID-19 pandemic. 

(IG)

CEYLON TODAY | Published: 2:00 AM Nov 24 2020

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