The Government has not made any decision to restructure domestic debt, State Minister of Finance Shehan Semasinghe clarified today (17).
In a Twitter message, he said this was so as negotiations of treatments on external debt are still being discussed with external bilateral and commercial creditors.
“The Government of Sri Lanka has no intention to impose any treatment on domestic debt which will have an adverse impact on the domestic banking sector, insurance sector, and superannuation funds,” he said.
State Minister Semasinghe further said there is no basis for recent speculation announced on restructuring domestic debt.
The comments come at a time when Sri Lanka has reached a Staff-Level Agreement with the IMF on a four-year program supported by the Extended Fund Facility, in September.
The agreement is to support Sri Lanka’s economic adjustment and reform policies with a new 48-month Extended Fund Facility with a requested access of about SDR 2.2 billion (equivalent to US$2.9 billion).
The new EFF arrangement will support Sri Lanka’s program to restore macroeconomic stability and debt sustainability while safeguarding financial stability, reducing corruption vulnerabilities, and unlocking Sri Lanka’s growth potential.
The agreement is subject to the approval by IMF management and the Executive Board in the period ahead, contingent on the implementation by the authorities of prior actions, and on receiving financing assurances from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors.
Meanwhile, Sri Lankan authorities have held two rounds of discussions with its official creditors.
The discussions represent another important step towards securing International Monetary Fund Board approval for Sri Lanka’s IMF program. (NewsWire)
