Central Bank of Sri Lanka (CBSL) has sent a letter to Nomura Holdings Inc. regarding an erroneous report on Sri Lanka external debt and listing Sri Lanka as one of the 7 countries with high risk of facing an exchange-rate crisis.

Recently, Nomura Holdings, releasing their latest analysis based on  “Damocles” model –an early warning model – listed Sri Lanka, South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine as the countries next in line for an exchange rate crisis.

Nomura’s analysis named Sri Lanka as the country that is most vulnerable to an exchange rate crisis. The article that appeared on www.ft.com quotes Nomura analysts as saying Sri Lanka had the worst outlook, and “with high short term external debt (US$ 160 billion), [Sri Lanka]’s refinancing needs are large.”

However, CBSL has issued a statement contradicting these findings stating that Nomura had made a computational error.

Senior Deputy Governor of CBSL Dr. P. Nandalal Weerasinghe, in letter to Nomura Holdings, has sternly advised to correct this mistake as the Sri Lanka’s short term external debt is nowhere near the US$ 160 billion figure that Nomura analysts have quoted and that Nomura Holdings have made a serious computational error with regard to Sri Lanka’s external vulnerability.

“Sri Lanka’s short term debt and liabilities are currently estimated at US$ 14.3 billion”, he provided further.

As such an erroneous report could to trigger an unwarranted panic amongst investors, particularly in the context of current volatile global market conditions, states Dr. Weerasinghe in his letter to Nomura.

“I’m certain that Nomura Holdings Inc. understands our concern, and I shall be grateful if you could immediately correct this error, and provide similar publicity to the correction without any delay”, further read the letter.