Questions surround latest bond issue of Central Bank (Watch Report)

Questions surround latest bond issue of Central Bank (Watch Report)

Written by Staff Writer

08 Mar, 2015 | 8:11 pm

A cloud of suspicion has descended around the latest bond issue of the Central Bank of Sri Lanka, with accusations of insider trading being leveled.

Media reports on Sunday March 08, bear testament to the above.

News1st delved deep into this story.

The website of the Central Bank of Sri Lanka defines a Treasury Bond as a medium and long term debt instrument issued by the Government the Registered Stock and Securities Ordinance No. 7 of 1937 when it raises domestic public debt for budgetary purposes.

In a nutshell, government’s use treasury bonds to raise funds, paying interest to the holders of the bonds, when they mature.

In its latest bond issue, the Central Bank had reportedly intimated to the authorised primary dealers, that it was seeking to raise one billion rupees.

However, issuing a statement on  March 6, the Ministry of Policy Planning and Economic Affairs, noted that on the 26th of February, at a meeting between the Minister of Higher Education, Highways and Investment Promotion, the Treasury Secretary and the Governor of the Central Bank, the Minister, Kabir Hashim, had requested urgent funding of about 15 billion rupees, to recommence several highways and road projects.

The website of the Central Bank of Sri Lanka, lists 16 authorised primary dealers as of October 2013.

News 1st learns that the issuing of treasury bonds is regulated by a Tender Board at the Public Debt Department of the Central Bank which comes under the purview of a Senior Deputy Governor.

News1st contacted a Senior Deputy Governor at the Central Bank, P. Samarasiri, on this matter.

He said that he cannot comment on the issue at the present moment and requested us to direct any questions to the governor.

However, our attempts to contact the governor, proved futile.

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