COLOMBO: Sri Lankan government has announced a restructuring plan for its domestic debt to meet goals set by the International Monetary Fund and to revive its economy, Reuters reported on Thursday.
Sri Lankan central bank governor said that the country is asking foreign investors to take a 30 % cut as it pursues to restructure its massive loan. A severe shortage of dollars tipped the country into its worst financial problem, prompting its first foreign loan default in May 2022.
Sri Lanka Reveals Domestic Debt Plan
Sri Lanka’s central bank revealed the restructuring strategy, which includes exchanging capital bills into long-term bonds. Central bank governor Nandalal Weerasinghe said that as per the domestic loan revamp, holders of domestic issued dollar-denominated bonds like Sri Lanka Development Bonds will be given three choices. “The government is asking foreign debt holders for a 30 % cut but we are still holding discussions over it,” Weerasinghe maintained. The Iceland nation currently has $12.5 billion in international sovereign bonds.
