Fitch says CBSL Road Map lacks precision

0
162
  • Points to absence of sources, timelines for ‘targeted’ inflows 

Although the Six-Month Road Map of the Central Bank of Sri Lanka (CBSL) at the commencement of this month (October) outlined the targeted forex inflows, Fitch Ratings stated that the Road Map has not indicated the details with regard to the sources as well as the timeline for those financial rollouts. 

Central Bank of Sri Lanka - Wikipedia

During the commentary that was made on Sri Lanka as a part of the “What Investors Want to Know: Emerging Market Sovereigns – 4Q21” report, Fitch Ratings Director – Sovereigns Sagarika Chandra said: “In a Six-Month Road Map published in October by the Central Bank of Sri Lanka, the authorities have outlined plans to secure funds through bilateral, multilateral, and other syndicated loans for 1Q22. However, the financing plans contain limited details, including the sources and timelines of financing arrangements.”

Ad

She further mentioned: “As positive rating sensitivities we have flagged the need for more enduring improvements in the external and public finances.”

The Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability, which was presented by CBSL Governor Ajith Nivard Cabraal on 1 October for the period from October 2021 to March 2022, demonstrated that the Government of Sri Lanka expects forex inflow of G-2-G loans, multilateral loans,  syndicated loans, investment in Sri Lankan rupee (LKR)-denominated G-Secs, Sri Lanka Development Bond (SLDB) parcels, monetisation of under-utilised assets, other foreign direct investments (FDIs) excluding the one of the Colombo Port City, and rollovers of offshore banking unit (OBU) loans, which is a generation of approximately $ 7,250 million. 
Furthermore, it showed that the CBSL is anticipated to generate an inflow of $ 3,800 million from swaps with other central banks, domestic short/long swaps, sales to facilitate fuel, and essential imports, as well as purchases of remittances and export proceeds. 

However, the Road Map has not presented details pertaining to other central banks bringing in foreign inflows.

Ad

Leave a Reply