Basil hints at talks with IMF

Friday, 28 January 2022 00:00 - - {{hitsCtrl.values.hits}}

UK’s Financial Times yesterday reported that Sri Lanka is negotiating debt relief with international bondholders and is weighing an approach to the IMF.

Speaking to Financial Times, Finance Minister Basil Rajapaksa had said that the Government is negotiating and trying all options to avoid a debt default and to alleviate the economic crisis.

He had said the Government is negotiating with bondholders on repaying International Sovereign Bonds and also with creditors to adjust the debt repayment.

Sri Lanka has almost $ 7 billion in debt repayments this year, but less than $ 3 billion of foreign reserve.

However, speaking to CNBC recently, Central Bank Governor Ajith Nivard Cabraal was certain that Sri Lanka does not require the assistance of the IMF.

“Well, we do not need relief if we have an alternative strategy,” Ajith Nivard Cabraal said on CNBC’s ‘Squawk Box Asia’ on Monday.

He claimed Sri Lanka is able to finance its outstanding debt, especially International Sovereign Bonds, “without causing any pain to our creditors”.

He argued the Government does not need to approach the IMF, especially if it is successful in finding Government-to-Government as well as Central Bank solutions in the short term.