Central Bank Governor Dr. Nandalal Weerasinghe expressed hope that debt sustainability can be reached without re-structuring domestic debt, which will have serious implications on the domestic financial sector.
“The position of the government still remain that we will restructure only the external debt.”Governor Weerasinghe told at the Monetary Policy press briefing held yesterday (18) at the Central Bank.
Governor Weerasinghe stated that Sri Lanka needed time to repay external debt as the country is currently experiencing a Balance of Payments crisis.
He said further that restructuring domestic debt will have serious implications on domestic financial sector including banking sector and it will not help economic recovery or even external creditors to recover relief that they intend to provide us.
“We want to minimise the impact on the Banking sector, economy, EPF as a result of debt restructuring. With this exercise, the economy will recover faster and external creditors will be able to recover their debt faster.”
Speaking further, Dr.Weerasinghe said CBSL has asked banks to look at all the implications in particular rising Non Performing Loans (NPLs) that they might experience due to current economic crisis.
