State Minister says no plans to restructure domestic debt

Friday, 18 November 2022 00:30 - - {{hitsCtrl.values.hits}}

State Minister of Finance shehan semasinghe yesterday clarified that there are no plans by the Government to restructure domestic debt.

“Government has not made any decision to restructure domestic debt as negotiations of treatments on external debt are still being discussed with external bilateral and commercial creditors,” Semasinghe said in a tweet yesterday.

“GOSL has no intention to impose any treatment on domestic debt which will have adverse impact on domestic banking sector, insurance sector and superannuation funds. There is no basis for recent speculation announced on restructuring domestic debt,” he added.

Some policy activists including Verité Research are strongly recommending a domestic debt restructuring by way of re-profiling Treasury Bonds as opposed to haircut on coupon or principal.

As of the end of July, Sri Lanka’s public debt amounted to 121% of GDP of which 59% is Rupee Debt. The International Monetary Fund (IMF) from which the Government is planning to borrow $ 3 billion via a four-year Enhanced Fund Facility, has determined that Sri Lanka’s public debt is unsustainable. Sri Lanka has suspended servicing of all external debt outstanding as of 12 April.

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