Sri Lanka mulls domestic debt optimisation for financial stability
Central Bank of Sri Lanka said authorities are exploring options for domestic debt optimisation aimed at liquidity relief
Colombo: The Central Bank of Sri Lanka said authorities are exploring options for domestic debt optimisation aimed at liquidity relief while preserving financial stability in order to avoid further eroding of the crisis-hit island nation’s repayment capacity.
In a statement, the bank said that the debt optimisation will be conducted on a voluntary basis and be based on its consultations with major Treasury Bonds holders, reports Xinhua news agency.
Also Read
The statement followed an investor presentation that the central bank officials made to explain the current economic situation in the country, and outline the key pillars and objectives of an International Monetary Fund (IMF) program as well as the next steps concerning the engagement with creditors.
On March 20, the IMF executive board approved a bailout package for Sri Lanka, serving to unlock up to $7 billion in funding from international financial institutions, the central bank said.
“The IMF program provides a clear roadmap in terms of policy implementation and will stabilise the economy of Sri Lanka and allow the country to regain its growth potential and address its economic vulnerabilities,” the statement said.
The central bank said the Sri Lankan government has successfully taken all actions needed to secure the IMF financing.
Sri Lanka started related negotiations with the international lender in 2022 after the South Asian country was hit by the worst-ever economic crisis since Independence in 1948.
