Sri Lanka is committed to meeting all its debt repayments Dr.Nandalal Weerasinghe said, debt restructuring negotiations should be completed in the next six months.
“There has been good progress this month with India already pledging financing assurances. We expect assurances from China and Japan soon,” Weerasinghe said at an event titled “Economic Outlook 2023”.
The island nation of 22 million people has grappled with many challenges. These include a shortage of foreign currency, runaway inflation and a steep recession.
It is the worst crisis since independence from Britain in 1948.
India last week told the IMF that it strongly supports Sri Lanka’s debt restructuring plan.
“Once the IMF program is unlocked then we will start specific debt restructuring negotiations with both commercial and bilateral lenders,
” the head of the apex bank said.
“We hope to complete this process in six months. The biggest uncertainty is the timeframe for the debt restructuring. It is only after debt sustainability is assured can Sri Lanka return to a sustainable growth path,” he added.
- Weerasinghe added that good progress has been made in negotiations with the Paris Club creditor nations and other creditors.
- Talks with banks to reduce rates are ongoing and domestic debt restructuring is uncertain.
- Inflation is expected to reach single digits by 2023.
- Negotiations with the Paris Club are making good progress.
- NCPI eased to 59.2% in December.
- The central bank is aiming to bring down interest rates in line with inflation expectations.
The central bank is aiming to bring down interest rates in line with inflation expectations and the process would be fast-tracked once the IMF programme is unlocked, he added.