Sunday, August 23, 2009

Sri Lanka’s foreign reserves top $3 bn- CB

Sri Lanka’s foreign-exchange reserves have exceed $3 billion after more than $ 875 million flowed in during the week from an international hedge fund in the US interested in investing in government Treasury bonds.
The 875 million US dollar flow from a "US- based fund" will increase the maturity profile of government debt, said Central Bank Governor, Ajith Nivard Cabraal.

“This is a result of a road show we did in the U.S. recently,” he said. “Investors are expecting interest rates to fall further so they can lock in profits.”

The central bank last month raised its 2009 growth forecast to as much as 4.5 percent from an earlier estimate of 2.5 percent, citing increased investments and reconstruction projects. The Central Bank has cut interest rates to a three-year low on easing inflation.

The end of the war in May and a $2.6 billion loan approved last month by the International Monetary Fund have boosted investor confidence and increased capital flows into the country.

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