Sri Lanka’s chairman Ranil Wickremesinghe responded to the opposition’s criticism of the cash-strapped nation’s agreement to reduce its external debt by negotiating with big bilateral creditors on Tuesday. He also pledged to submit all agreements and documents to a legislative panel for review. However, the two-day Parliament discussion on the package was postponed due to opposition members who complained about the lack of transparency with the agreements reached.
Dismissing the Coalition’s criticism as false, Wickremesinghe argued,” No diplomatic creditor would agree to a decrease of principal sum. Instead, agreements are allowed through expanded payment times, grace periods and lower interest rates”.
The senator, who also serves as the finance minister, stated that the agreements with diplomatic debts include extending the entire debt settlement grace period until 2043, allowing interest rates to remain below 2 %, and extending the principal repayment period until 2028.
Wickremesinghe said Sri Lanka’s external debts then totals USD 37 billion, which includes USD 10.6 billion in diplomatic breaks and USD 11.7 billion in international funds. The business loan is USD 14.7 billion, of which USD 12.5 billion is in royal ties. The bill reform, he said, aims at making the loan green, freeing up money for public service.
His office posted on X with the promise that President Wickremesinghe may submit all agreements and documents to Parliament’s Public Finance Committee, underscoring the need for thorough investigation and a large focus on the subject.
He claimed that the debt restructuring may allow for greater funding for the public service.
According to Wickremesinghe,” the nation is then able to secure foreign loans and resume projects that were partially halted due to lack of foreign funding.”
Sri Lanka’s authorities declared a sovereign default in April 2022, which ended international lending there.
Wickremesinghe acknowledged India and Bangladesh’s short-term record support during that time. ” At that point, two friendly countries, India and Bangladesh, assisted us by providing short-term payment assistance. He claimed that no other nation was able to stretch long-term loans.
Wickremesinghe assured Parliament that all debt restructuring agreements may be finalized after the ongoing discussions with royal bond holders were reached.
Wickremesinghe’s declaration was followed by the main opposition leader, Sajith Premadasa, who reiterated that the state has failed to secure the best possible deal in the debt restructuring process.
