Sri Lanka to issue domestic Dollar Bonds as short-term liquidity tool

The Government of Sri Lanka has decided to issue domestic dollar-denominated bonds as a new loan instrument aimed at strengthening short-term liquidity within the local foreign exchange market.

According to the government, foreign exchange inflows have improved significantly in recent months, boosting liquidity levels in the domestic forex market. As a result, authorities have turned their attention to creating opportunities for investment in foreign currency through local commercial banks.

A market survey conducted by the Central Bank’s Department of State Loans in August 2025 revealed strong investor interest, with participants expressing willingness to invest up to USD 100 million for periods ranging from less than one year to three years.

Based on these findings, the Cabinet of Ministers has granted approval to a proposal submitted by President Anura Kumara Dissanayake, in his capacity as Minister of Finance, Plan Implementation, and Economic Development, to proceed with issuing domestic dollar bonds within the existing legal framework.

The initiative will be implemented through the Ministry of Finance, Plan Implementation, and Economic Development and is expected to serve as a short-term liquidity management tool to support financial stability and investor confidence. (Newswire)

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