Sri Lanka to Assess Restructuring of Domestic Debt Amid Economic
Sri Lanka’s central bank and Treasury officials announced on Thursday that the country will assess the restructuring of its domestic debt in an effort to achieve liquidity relief amid its worst economic crisis in more than seven decades. The officials revealed during a virtual presentation that exploring options for a domestic debt operation will help optimize the local currency T-Bills and T-Bonds. Sri Lanka’s total currency debt is equivalent to USD 36.6 billion. The country expects to finalize the restructuring by May 2023. The restructuring will only consider T-Bills held by the central bank, while T-Bonds holders will have the option to participate in a voluntary domestic debt operation.
The announcement follows the International Monetary Fund’s approval of Sri Lanka’s IMF program, which unlocks up to $7 billion in funding from the IMF and other IFIs. The IMF program provides a clear roadmap in terms of policy implementation and will stabilize the economy of Sri Lanka, the officials said.