Debt talks will be complete in January 2023

Negotiations with creditors will be complete in January 2023 - Governor

by Zulfick Farzan 15-12-2022 | 3:15 PM

COLOMBO (News 1st) - Sri Lanka's Central Bank Governor Dr. Nandalal Weerasinghe said that reforms are necessary for the country, while maintaining the independence of the Central Bank.

Dr. Weerasinghe said the Central Bank should become an independent and strong institution, and the Central Bank should not be permitted to bridge the budget deficit.

"There has to be another institution framework which ensures that this bad practice doesn't take place. Although we know it is bad practice, but if there is no law or no framework, obviously, that will happen again," he said.

The Governor speaking at the CA Sri Lanka’s Annual Research Symposium also said that there should be a productivity commission to monitor government decisions on investments.

The Central Bank Governor cleared the air on bilateral creditor discussions, citing that it had been miscommunication

"We are in the process of negotiating to obtain financing assurances from bilateral creditors, mainly from Paris club including Japan, India and China. There was a report in the media today. I saw at the cabinet briefing that they had mentioned that we concluded the negotiations. This is probably a miscommunication," said the Governor.

He said Sri Lanka has not yet reached the conclusion stage, but have made a lot of progress, adding that the intention is to complete the negotiations in January 2023.

"If we miss this month, probably the next month we will be able to complete that on the basis of progress we have made. We will probably be able to stabilize the economy in the short term but obviously without having long term structural reforms as well as other proper policy framework, we will not be able to," he added.

"We move in the same direction, even with IMF or without IMF, to correct the imbalances and for the country to recover on a much more sustainable basis," he stressed.

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