The country has already been forced to go to the IMF for a bailout after accumulating foreign debts of nearly USD 30 billion, according to central bank figures.

Much of the money went towards ambitious infrastructure projects funded by Chinese loans under the previous government, which closely allied itself with Beijing.

But many of these have been unsuccessful including a huge airport in the home town of the former president.

Government spokesman Gayantha Karunaratne said the cabinet had approved the decision to raise USD 5 billion through bonds.

Last year the government raised USD 3.73 billion through dollar-denominated bonds.

It secured a USD 1.5 billion bailout from the International Monetary Fund in June 2016 following a balance of payments crisis.

The Central Bank of Sri Lanka said last week the economy grew at a slower than expected 3.3 per cent in the third quarter of last year.

However, it expects the economy to expand this year with improvements in foreign capital inflows, agriculture and exports.