Deputy Finance Minister Anil Jayantha Fernando told Parliament that Sri Lanka’s total public sector debt stood at approximately US$102.2 billion as of the end of March 2026, while stressing that debt sustainability should be assessed based on a country’s ability to service its obligations rather than fluctuations in exchange rates.
Speaking in Parliament, Fernando said data released by the Public Debt Management Office (PDMO) showed that central government debt amounted to US$98.96 billion by the end of March 2026.
According to the Deputy Minister, when debt owed by provincial and local government institutions, as well as State-owned enterprises, is included, the country’s total debt stock reaches approximately US$102.2 billion.
He noted that the figure reflected a reduction compared to the level recorded at the end of 2025.
Fernando also sought to clarify what he described as common misconceptions regarding public debt calculations, particularly the impact of exchange rate movements on debt reported in Sri Lankan rupees.
“When debt is obtained in dollars, the liability remains in dollars. When debt is obtained in rupees, it remains in rupees,” he said.
“International transactions and reporting requirements often have to be presented in US dollars. However, when those figures are converted into rupees, the reported value can change depending on the exchange rate.”
Explaining the difference between debt growth and exchange rate losses, Fernando said a depreciation of the rupee would increase the rupee value of foreign currency debt without increasing the actual debt obligation.
“That does not mean the dollar debt has increased. The additional amount reflected in rupees is an exchange rate loss, not new debt,” he said.
Fernando said the key issue for policymakers was maintaining debt sustainability.
“What matters is whether the Government can repay its debt without difficulty from the income it generates,” he added.
During the Deputy Minister’s speech, opposition MP Ravi Karunanayake raised a question regarding the figures presented.
Karunanayake said data submitted to the Committee on Public Finance (COPF) indicated that Sri Lanka’s total debt stood at Rs. 34 trillion, questioning the apparent discrepancy between the figures presented in Parliament and those discussed at the committee level. (Newswire)
