Senior Deputy Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe stated that Sri Lanka has maintained a good track record in repaying its foreign debt obligations and has made repayments on time. “If you look at the debt service payment for the year 2020 it is about $ 4.8 billion and we had about 7.5 billion reserves at the end of 2019. So far for 4-months we have been able to meet all debt service obligations on time without any delay and still by the end of April we have maintained 7.2 billion reserves compared to 7.6 billion even after settling $1.6 billion of debt payments. Going forward there are some more payments about $3.3 to be paid,” he said whilst participating in a panel discussion titled ‘State of the Sri Lankan economy as reflected in the Central Bank Annual Report 2019.” Speaking further, he also noted that in the near future the country will have access to international financial markets and can raise more funds to meet debt repayments. “The government is in the process of discussing external financing plans. Emerging and frontier markets will not have access to international capital markets in the near future. So there are negotiations to have different facilities in place. In addition, the Central Bank has been discussing with the Reserve Bank of India for $ 1 billion. With all these plans, we are very confident that we would be able to meet all these debt-servicing obligations during the balance period and once the situation improves towards the end of this year or early next year, we would have the access to international capital markets and we will be able to raise not only the official credit lines and concessional lines but also the commercial financing for us to meet the reserve obligations,” Dr. Weerasinghe said. Dr. Weerasinghe also stated that the Central Bank had simply fulfilled its primary duty in buying Government securities during the past few weeks to infuse more liquidity into the system. “The role of Central Banks, especially at a time of unusual circumstances or exceptional circumstances we are facing right now, the prime responsibility of any Central Bank is to provide sufficient liquidity. If we had not done that imagine the situation. Banks would not be able to smoothen out the COVID-19 impact, support businesses and people would not have cash in hand, he said.
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