Daily Mirror - Print Edition

No final decision on DDO yet

21 Jun 2023 - {{hitsCtrl.values.hits}}      

 As a final decision on domestic debt optimisation (DDO) is yet to be made, the government on Monday urged interested parties to refrain from making speculatory comments that undermine the stability of financial markets.
“Once the government reaches a final decision,  we are prepared to inform both the parliament and the public. 

This is an extremely sensitive matter that significantly influences the market situation,” State Minister of Finance Shehan Semasinghe told reporters in Colombo on Monday. 
 “It is vital that we refrain from making statements that create doubts regarding this optimisation, as it helps maintain stability in our financial market. We all should act responsibly in this regard,” he added.   Semasinghe assured that the government would make a final call on the DDO while ensuring the stability of the country’s banking and financial systems.
 “Our focus is on finding solutions for optimising the banking and financial system of our country without negatively impacting stability, which is crucial,” he stressed.


 The Minister highlighted the encouraging trend of declining yields on Treasury bills, which reflects the growing confidence of the markets in connection to the effectiveness of monetary policy measures.  As a result, he expects a marked decline in the government’s interest costs, which rose substantially during the first quarter of this year. In addition, he noted that market interest rates would also come down. Upon the conclusion of President’s visit to France, the Minister highlighted that the country would have a better understanding on restructuring of foreign debt.  He said the government remains confident that the restructuring of foreign debt would be concluded In September when the country faces the first review under the IMF programme.  He stressed the government remains committed to the IMF programme despite short term challenges.