Sri Lanka: Whopping Rs. 3 Trillion for ISB settlement, external debt reworking

COLOMBO (News 1st); Sri Lanka has allocated a massive Rs. 3000 billion for for the implementation of foreign debt restructuring and the settlement of international sovereign bonds under the foreign debt restructuring program.

President Ranil Wickremesinghe while presenting the 2024 Budget in Parliament on Monday (13) said that as part of the restructuring of International Sovereign Bonds under the External Debt Restructuring Process, Sri Lanka's net debt is reduced to its present value.

"USD denominated New financial instruments should be issued to settle existing international sovereign bonds. Accordingly, for the settlement of existing International Sovereign Bonds, budget allocations are required to record the transaction in the government book of accounts," pointed out Wickremesinghe adding that Rs. 3,000 billion will be allocated for this purpose.

He also went on to note that due to the space created by the debt restructuring process, the government was able to find resources for relief measures.

He added that Under the debt restructuring supported by the International Monetary Fund, Sri Lanka's public debt as a percentage of GDP is expected to be reduced from 128 percent in 2022 to 95 percent in 2032. 

President Ranil Wickremesinghe said that after the completion of the debt restructuring process, the overall macroeconomic stability and stability of the financial sector will be further strengthened. 

"We have now been able to achieve significant progress in the debt restructuring process. Key aspects of Domestic Debt Optimization are completed," he said.