Sri Lanka's domestic debt will not be restructured: Central bank governor

29 Apr 2022 01:04pm

A labourer sleeps on a handcart in front of closed shops in Colombo on April 28, 2022, following a one-day general strike called by trade unions in support of calls for President Gotabaya Rajapaksa to resign over the worsening economic crisis. - AFP

COLOMBO - Domestic debt in the form of government securities and development bonds will not be restructured as restructuring external debt is a top priority for Sri Lanka, reported Xinhua, quoting the central bank governor on Thursday.

Addressing a meeting of the Committee of the Ceylon Chamber of Commerce, central bank governor Nandalal Weerasinghe also provided an update on the progress made during the recent discussions with the International Monetary Fund (IMF) and World Bank.

He said progress has been made towards establishing a macro-fiscal policy framework and initiating structural reforms.

The central bank governor also expressed confidence that a staff-level agreement with the IMF is likely to be reached within the next two months.

Weerasinghe announced that additional measures will be implemented to address urgent economic concerns.

The measures include introducing regulations to encourage the US dollar flows currently transacting in the informal market to be channeled through the formal banking system.

As a result of policy measures already introduced by the central bank and the government, he is of the view that expenditure on imports will be declining further to more sustainable levels.

Sri Lanka is going through an economic crisis brought about by foreign currency shortages and it halted external debt repayment on April 12. - BERNAMA