The opposition tells the government. to outline debt repayment plan amid rating downgrade – Business News

SJB MPs Harsha de Silva at the press conference flanked by Eran Wickramatne and Kabir Hashim
Photo of Mel’s Kithsiri

  • SL’s total debt estimated at $6.9 billion; Foreign exchange reserves as of December 31, 2021 were US$3.1 billion
  • Questions why govt. so keen to pay $500m in sovereign bonds due Jan 18
  • Says SL’s debt situation is worse than expected according to IMF’s debt sustainability analysis
  • China has agreed to restructure only interest-free loans and not commercial loans in response to the president’s recent request

By Yohan Perera
The government is expected to tell the nation how it is going to repay the huge debts coming due this year as all three global rating agencies have downgraded Sri Lanka’s sovereign rating deeper into junk territory, the latest being Standard & Poor’s (S&P) this week – citing heightened external funding risks, main opposition Samagi Jana Balawegaya (SJB) said yesterday.

SJB MP Harsha de Silva told a press conference that the government should tell the country how it plans to settle the total debts estimated at $6.9 billion for this year, the rating agencies continuing to downgrade Sri Lanka.

“The statement made by Central Bank Governor Ajith Nivard Cabraal that Sri Lanka would face no problem in servicing debt service as the country would settle the $500 million on January 18 is unacceptable,” said the deputy.

“According to the information we have received, the IMF has carried out a debt sustainability analysis and Sri Lanka’s situation is worse than expected,” he alleged. “Furthermore, one wonders why the government is so keen to settle the $500 million obligation on January 18 at a time when there are no funds to purchase fuel and other essentials,” he said. he declared.

Referring to President Gotabaya Rajapaksa’s recent request to the Chinese Foreign Minister to reschedule China’s loans,

de Silva said China has indicated it is willing to reschedule only interest-free loans and not commercial loans.

“This situation will not help Sri Lanka because the percentage of interest-free non-commercial loans owed to China is low compared to commercial loans,” he said.

The Central Bank governor this week rejected calls for debt deferral and said Sri Lanka would honor all external debt maturing this year with strategies already in place to secure dollar funding from nations and institutions. friends.

The government is also pinning its hopes on tourist entries, as a recovery in tourist arrivals is expected this year.

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