Sri Lanka’s dollar bonds jumped over 7% on Monday and continue to rally further on positive developments:

  • The country is preparing agreements for a $3.6bn credit line for oil imports from Oman after the cabinet gave approval. It has also prepared a $500mn credit line from India. Petroleum Minister Udaya Gammanpila said that Central Bank Governor Ajith Cabraal has promised to supply the required foreign exchange for fuel imports, post which the credit lines will be used. This will ensure that there is no fuel shortage.
  • Also, Sri Lanka’s Board of Investment (BOI) chairman Sanajaya Mohottala said that the island nation will receive close to $1bn of Foreign Direct Investment (FDI) in 2021 despite the pandemic and other disruptions. FDI has been falling in the last two years. It posted a record high of $1.8bn in 2018 post which it fell to $793mn and $528mn in the following years. In 1H2021, Sri Lanka has already received $398mn in FDI.

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