Public Statement from Sri Lanka Banks’ Association

April 28, 2022 at 12:42 PM

The Sri Lanka Banks’ Association (Guarantee)  Ltd (SLBA) welcomes the expeditious and transparent changes at the helm of Sri Lanka’s economic policy formulation an implementation apparatus.

The appointment of Dr Nandalal Weerasinghe (former Senior Deputy Governor of CBSL) as Governor of the Central Bank of Sri Lanka (CBSL) and Mr Mahinda Siriwardana (Deputy Governor of CBSL) as Secretary to the Ministry of Finance on 8.4.2022  followed by announcement of progress with the IMF for debt restructuring support (emergency, bridging and long term) have been generally well received.

Addressing the immediate need for restructuring the nation’s debt obligations on a sustainable basis was inevitable. The interim policy on servicing Sri Lanka’s external debt obligations announced on 12.04.2022 while working towards sustainable debt restructuring plan supported by the IMF for long term (and short term emergency and bridging purposes) follows the declared intent to be transparent.

It is noted that the aim is, “to expeditiously design and present to the country’s creditors a comprehensive plan for restoring the country’s external debt to a fully sustainable position”. The publication on 18.4.2022 of FAQ’s (Frequently Asked Questions) by the Ministry of Finance is an initiative to calm fears arising from uncertainties on the impact of the Interim Policy. This transparency is welcomed. The Ministry of Finance and Central Bank would do well to continue the public dialogue to calm fears and instability that uncertainty brings.

Alongside these developments we urge the political leadership to create a stable political environment in which fiscal and monetary policy objectives for sustainable economic recovery can be realised.

Note: The SLBA represents all Licensed Banks in Sri Lanka and encourages cooperation among members and coordination of banking sector operations as required. Within this ambit assisting in maintaining and developing a sound banking structure in Sri Lanka in accordance with policy and regulatory frameworks set by the Central Bank of Sri Lanka is a key aim.