Investor Presentaiton

% of GDP 5.0 1.1 Overview of Public Debt Liability of public debt stock has been increasing since the independence of Sri Lanka in 1948 mainly due to two reasons: persistent fiscal imbalances and depreciation of the domestic currency. During last 40 years, as a percentage of GDP, overall annual average budget deficit was recorded at 8.6% ➤ USD/LKR exchange rate depreciated to Rs. 155.25 as at 26 February 2018 compared to Rs. 8.83 recorded at end 1976. (Please note that the Current Exchange rate determination is market driven whereas in 1976, it was fixed.) Chart 1 Overall Budget Surplus (+)/ Deficit(-) as a % of GDP 1950-2016 Chart 2 LKR Depreciation against USD - 1950 2017/Sep 0.0 -5.0 M -10.0 -15.0 -20.0 -25.0 1950 1955 1960 1965 1970 1975 1980 1985 1990 2005 2010 2015 10 20 30 40 40 50 Overall Budget Surpus (+) / Deficit (-) DEBT MANAGEMENT AND SUSTAINABILITY LKR Depreciation against USD STRENGTHENING LIABILITY MANAGEMENT - SRI LANKAN PERSPECTIVE 0 - 096T 1965- 1970 1975 1980 1985 1990 · සංකා මහා ද Rs. / USD (RHA) ශ්‍රී ලංකා මහ බැංකුව இலங்கை மத்திய வங்கி CENTRAL BANK OF SRI LANKA 4 20 40 80 120 160 Rs. / USD 200

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