By Sanath Nanayakkare
If Sri Lanka cannot arrive at an agreement with the foreign bond holders to restructure the foreign currency debt owed to them by Sep 27, even World Bank aid given to Sri Lanka to import fertilizer and medicine will cease, Patali Champika Ranawaka, Member of Parliament from Colombo District said.
“This month is crucial. We have to come to an agreement with our foreign creditors. If we can’t come to an agreement, we won’t receive the approval from the IMF to have access to funds from its Extended Fund Facility Programme. If that happens, the World Bank that gives us funds to import fertilizer and medicine will also cease such financing after October 2023. So, Sri Lanka has to come to an arrangement by Sep. 27 with the foreign bond holders to show that Sri Lanka’s foreign debt has been brought back to a sustainable level. Keep in mind that if we procrastinate for another 2-3 years, there won’t be a country left for us to rebuild,” he said.
However, State Minister of Finance Ranjith Siyambalapitiya told the media that he was confident that the negotiations with the IMF would move in a favourable direction.
“Sri Lanka has implemented the conditions of the IMF programme to a great extent. This has put immense hardships on the people. But this time the people realized that conditions or proposals laid by the IMF were not for the benefit of the IMF and it was for the survival of the fiscal situation of the country. The public also realized that those conditions would ensure long term recovery and growth. That is why people endured the hardships the programme entailed. As a result, I think Sri Lanka will be able to have a favourable review at the upcoming IMF review.”
Meanwhile, Fitch Ratings said last week that while the domestic debt optimization programme is nearing completion, uncertainties prevail over the completion of Sri Lanka’s foreign-currency sovereign debt restructuring.