Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe says the country will require at least six months more to start repaying debt. Governor Weerasinghe speaking at a media briefing today said there will be no debt servicing until the country is able to restructure external debt.
Governor Weerasinghe added the Central Bank has almost finalised plans to restructure debt while proposals will be submitted to the Cabinet soon. The Governor said “We hope to be able to reach an agreement with our creditors in about six months. Our position is very clear. Until they come to (a) restructure (agreement), we will not be able to pay.”
Dr. Weerasinghe also stated that unrest in the country last week and the inability to finalise a Minister of Finance could lead to delays in negotiations with creditors and talks with the International Monetary Fund. The Governor said bailout talks with the IMF were underway, while a final agreement requires approval by the Finance Minister that Sri Lanka is yet to appoint.
Meanwhile Dr. Weerasinghe said he will continue to remain in the role of Governor considering the improvement in political stability amidst the economic crisis. The Governor recently claimed that he would step down from the post if the political stability cannot be ensured in the country.
He said “Earlier, there was no prime minister and no cabinet. Comparatively there has been significant improvement. We now have fresh appointments. We have also seen that our measures are working well. I would like to see a finance minister appointed. Now we are seeing improvement, so I think on that basis I intend to continue”.
The CBSL Governor also warned that inflation could rise to 40% in the months ahead driven largely by supply-side pressures and measures by the bank.
