Govt. reiterates intention to settle $ 500 m ISB next week

• Cabinet Co-Spokesman Dr. Ramesh Pathirana says SL has an unblemished reputation of honouring debt
• Asserts Govt. exploring all options including debt restructuring
• Discussions ongoing with World Bank and ADB, whilst keeping doors open to IMF as well
• Says Govt. liaising closely with India, China and Japan who had helped Sri Lanka historically
• Insists on managing the crisis, adding it will be over soon

Against widespread fears and claims, the Government yesterday expressed confidence that it would settle the $ 500 million worth of International Sovereign Bonds (ISBs) maturing next week.

“Sri Lanka has an unblemished reputation of honouring its debt. We have kept open all doors necessary to successfully manage the current economic crisis. The Government is confident of setting the upcoming $ 500 million ISB maturing on 18 January as well,” Cabinet Co-Spokesman Dr. Ramesh Pathirana said at the post-Cabinet media briefing yesterday.

Noting that the matter was not taken up at the Cabinet meeting held on Monday, the Minister said that it was discussed at intervals. 

“We are looking at all options available,” he added.

Dr. Pathirana opined that debt restructuring is also an option the Government is exploring at present.

“We need to talk to the agencies and the countries and at the same time. Currently, we are in discussion with the World Bank and Asian Development Bank (ADB). We have also kept our doors open to speak to the International Monetary Fund (IMF) too,” the Minister said. 

In terms of the countries, he said the Government was liaising closely with India, China and Japan who had helped Sri Lanka historically. 

“We are confident of managing this crisis, but it is a matter of time it will be over soon,” Dr. Pathirana added.

He also said that more in-depth answers to the debt repayment would be provided today, during a special media discussion with Central Bank Governor Ajith Nivard Cabraal, organised by the Government Information Department. 

On Monday, in a tweet, Cabraal said: “The individuals who screamed that Sri Lanka wouldn’t be able to pay the $ 500 million ISB maturity on 22 January are now screaming that we shouldn’t pay it, when we are ready to make payment. At the same time, Sri Lanka’s imports increased in 2021 to $ 21.6 billion, from $ 16.1 billion in 2020 and $ 19.9 billion in 2019.”

His tweet was in response to Daily FT’s exclusive feature on Monday, where leaders of the Ceylon Chamber of Commerce and top economists urged the Government to defer foreign debt repayment via rescheduling and use the scarce resources to meet essential imports.