'NSB bonds will boost Lanka's balance of payments'

The National Savings Bank (NSB) last week raised $ 750 million successfully from the international market. However, financial analysts said that the rates were relatively high. According to market sources the price guidance for the bonds was initially set at 9.25 percent. However, it had narrowed to 8.875 percent. The bank went to the market for $ 500 million and had been oversubscribed up to $2.0 billion, sources said.

Central Bank Governor Ajith Nivard Cabraal said that this would strengthen Sri Lanka's external sector balance and the balance of payments will turn into surplus, LBO reported on Friday quoting Cabraal. The deal attracted orders worth US $ 2.35 billion. Justifying higher rates Cabraal said that it is a good rate in the global financial market in today's context. Amidst uncertainty in capital markets, a two billion dollar order book was a good sign, and the money will also help shore up Sri Lanka's foreign reserves.

The government conducted road shows in several major international financial hubs to sell NSB bonds and the expected to raise US$ 1 billion. Investor meetings in London, New York, Boston, Hong Kong and Singapore will begin tomorrow and the government has invited expatriate Sri Lankans to invest.