Sri Lanka banking system stable, state banks operating smoothly: Central bank | Sinhala News

Sri lanka News – Sri Lanka’s central bank and the Finance Ministry says country’s banking system is stable amid speculation that there had been payment delay at a state bank.

“The Ministry of Finance and the central bank of Sri Lanka wish to assure the public and all other stake holders that the banking system is stable and that operations of the State Banks are being carried out smoothly, contrary to statements made otherwise,” a central bank statement said.

The statement came after questions were raised in parliament whether there had been a payment delay in a state bank.

“With great sadness we are saying this,” Samagi Jana Balawegaya legislator Harsha de Silva told parliament.

“We have heard that a state bank has defaulted. Please look into this immediately. ”

Sri Lanka banks have faced counterparty limit cuts since a downgrade of the sovereign credit which have tightened in recent times making it harder to roll-over contracts.

De Silva said a few months ago he warned in parliament about state banks borrowing dollars a high rates through swaps where premiums were negative.

“I told parliament three months ago that buy-sell swaps were done at negative premium (discount),” de Silva said.

Analysts have urged authorities to not to force convert dollar inflows and turn them into rupees which are then spent and allow them to remain as savings.

State banks have funded dollar loans to the Ceylon Petroleum Corporation in particular. (Colombo/Mar24/2022)

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