Raising the borrowing limit imperative for fighting COVID-19: Mangala Samaraweera

Raising the borrowing limit imperative for fighting COVID-19: Mangala Samaraweera

April 8, 2020   10:28 pm

Former Finance Minister Mangala Samaraweera today urged the government to immediately move a resolution in Parliament to raise the borrowing limit in order to avoid challenges in raising the funds necessary for managing the coronavirus crisis.

For the period of January 01, 2020 to April 02, 2020, the Government has borrowed Rs. 650.15 billion through Sri Lanka Development Bonds, a dollar-loan from the China Development Bank and primary auctions of Treasury bills and Treasury bonds, he said. 

Furthermore, Central Bank holdings of Government securities and other data on Central Bank open-market-operations suggest significant direct monetary financing of the deficit. This will add to the sum of government borrowings, the former UNP MP said.  

The borrowing limit, approved by a resolution of Parliament on 23 October 2019 for the period 1 January 2020 to 30 April 2020, is Rs. 721 billion. Last year, the Treasury issued Rs. 194 billion in bills and bonds between 3 April 2019 and 30 April 2019. 

“Therefore, it is almost certain that a breach of the borrowing limit is imminent,” he said. 

Samaraweera stated that once the borrowing limit is reached, there will be no legal authority under which public debt can be issued. “As a result, the government may face insurmountable challenges in raising the funds necessary for managing this crisis.” 

Due to these legal complications, there may also be delays in drawing down the USD 128 million (Rs. 24.4 billion) soft-loan granted by the World Bank for fighting COVID-19, he warned. 

“Therefore, in light of these urgent and unforeseen requirements arising from the pandemic, I urge the government to immediately move a resolution in Parliament to raise the borrowing limit.” 

“I am certain the entire Parliament will support such a resolution that responsibly increases the borrowing limit,” he said. 

Disclaimer: All the comments will be moderated by the AD editorial. Abstain from posting comments that are obscene, defamatory or slanderous. Please avoid outside hyperlinks inside the comment and avoid typing all capitalized comments. Help us delete comments that do not follow these guidelines by flagging them(mouse over a comment and click the flag icon on the right side). Do use these forums to voice your opinions and create healthy discourse.

Most Viewed Video Stories

Trump Tariff: Exports volume will reduce but real challenge is rates of Sri Lanka's competitors – expert (English)

Trump Tariff: Exports volume will reduce but real challenge is rates of Sri Lanka's competitors – expert (English)

Sri Lanka govt not considering retaliatory measures over Trump's tariff - Presidential Advisor (English)

Sri Lanka's opposition reacts to Trump's announcement on 30% trade tariff (English)

Ceylon Chamber urges continued engagement to secure further US tariff reduction (English)

Trump slashes tariff rate on Sri Lanka to 30% from 44% - But govt, private sector seeks further reduction

LIVE🔴Ada Derana Prime Time News Bulletin 6.55 pm

LIVE🔴 Ada Derana Lunch Time News Bulletin 12.00 pm

Sri Lanka gradually moving toward 5% inflation in coming quarters – CBSL Governor (English)