Minister of Finance Ali Sabry says discussions have commenced with various countries and institutions to obtain an investment of USD 1 billion for the Central Bank of Sri Lanka at the earliest to prevent the rapid depreciation of the rupee.
Speaking via an online press conference from the United States to explain the progress of talks with the International Monetary Fund, Minister Sabry said the IMF has reached a conclusion that Sri Lanka is currently unable to settle debt repayments.
The Minister said discussions are being conducted with the IMF as to how the country plans on paying off its existing debt and repay loans Sri Lanka hopes to obtain in the future as well.
Minister Sabry said discussions were held with the countries creditors within a short period of time, while they were informed that Sri Lanka currently does not have the ability to make debt repayments.
The Minister stated Sri Lanka was due to pay loan repayments of USD 500 million in April and June, while a loan repayment of USD 1 billion was due in July which had to be defaulted.
He said defaulting on debt does not mean repayments will not be made, adding it is merely temporarily postponed.
The Finance Minster said he hopes to appoint an expert panel of legal and financial advisors to implement a programme on debt restructuring within the next 10-15 days.
Meanwhile, the Minister of Finance also explained the financial support to be provided by the World Bank and India as emergency assistance.
The Minister said discussions with the World Bank have been conducted and the organisation has agreed to grant between USD 300-600 million which will be received shortly.
The Minster said the funds will be used to provide concessions to the poor and those most affected by the current crisis.
He added concessions will be provided for medicines, food items, other essentials and fertiliser.
The Finance Minister said the Asian Development Bank has also offered its support while discussions with India’s Finance Minister have been favourable.
Minister Ali Sabry said the request for a USD 1 billion extension to the Line of Credit for imports of goods and services has been received well adding he is confident that India will extend the facility to Sri Lanka.
The Finance Minister said the ADB has provided USD 21.7 million for the purchase of equipment, including essential medicines.
The Minister also refuted reports that the IMF solicited a guarantee.
Responding to a question posed by a journalist the Minister said reports that India is willing to pay a certain sum as a guarantee to allow Sri Lanka to seek IMF support were entirely false adding the international community including organisations such as the IMF, the World Bank and the UNDP are genuine in their efforts to assist Sri Lanka.
Minister Sabri condemned efforts by certain individuals attempting to take advantage of the current situation for political gains adding his intention was purely to support the country and banking system during this crisis.
He said the country was facing turbulent times adding any grievances with the President should be taken up with him when the situation normalises.
He reiterated no guarantee had to be paid to the IMF, and the prevailing need was to restructure the country’s debt.
He added if the Central Bank of Sri Lanka received investments of USD 1-2 billion, the value of the rupee will stabilise.