Central Bank chief upbeat on completing debt restructuring before IMF review

• Sri Lanka has to finalise deal to restructure its debt with both its domestic and foreign creditors before the completion of first IMF review

Despite delays pertaining to the debt restructuring exercise, the Central Bank Governor Dr. Nanadalal

Weerasinghe remains optimistic that Sri Lanka could complete it before the first review of the US$ 3 billion International Monetary Fund (IMF) programme.

He said there is a “little delay” in passing certain legislation required to carry out Domestic Debt Optimisation (DDO) due to cases filed by certain parties at the Supreme Court against the proposed DDO.
Dr.Weerasinghe said the discussions and negotions with the country’s external creditors are progressing well. “They are looking at the completion of the DDO,” he remarked. 

Sri Lanka has to finalise a deal to restructure its debt—both domestic and foreign—before the completion of the first review of the US$ 3 billion Extended Fund Facility of the International Monetary Fund (IMF).
An IMF team is expected to arrive in Sri Lanka next month for the review. The IMF in a brief note said the review will be held between September 14 and 27.
“A team from the International Monetary Fund (IMF) is scheduled to visit Colombo between September 14 and 27, to conduct the first review of the Extended Fund Facility (EFF) arrangement for Sri Lanka,” an IMF spokesperson said.

When queried about a timeline set for the completion of the external debt restructuring, Dr.Weerasinghe said, “We have come to an agreement with official creditors on the terms. That will have to happen before the next review.”
Describing the IMF review process, Dr. Weerasinghe explained, in September, the IMF will conduct the review, followed by the documentation phase in October-November.
“So, we have time to complete that part (come to an agreement with the country’s foreign creditors),” he said.