“The objectives of these directions are to stabilise any financial volatilities created by the foreign funding exposures of LFCs and provide a risk management framework for such foreign currency borrowings,” a release said. Prior to these directions, CBSL permitted LFCs satisfying criteria such as utilization for purposes with national interest, maturities over 5 years, complying with the prudential requirements, etc. to raise foreign currency borrowings on a case-by-case basis up to 10 per cent of total assets. The tenure of the foreign currency borrowings shall be 2 years or more. LFCs are required to maintain the cost of such foreign currency borrowings within the limits stipulated by CBSL.

Source: The Nation April 16, 2021 18:01 UTC