COLOMBO: Sri Lanka is considering a restructure of nearby and sovereign debt , President Ranil Wickremesinghe said on Friday (Aug 5), as the island country battles its worst financial crisis in its 3rd party history.
The country is due to restart bailout talks with the International Monetary Account (IMF) in Aug in the hope associated with securing US$3 billion in funding.
The government is working with its financial plus legal advisers Lazard and Clifford Chance to finalise a plan in order to restructure overseas debt, including about US$12 billion owed in order to bondholders.
“Have we got to look at local debt? That has far-reaching consequences, ” Wickremesinghe told the conference in Colombo. “The financial experts are looking at both stuff. ”
Sri Lanka’s central financial institution governor said upon Jul 7 the country would not seek to restructure local financial debt.
The IMF has also previously warned countries of problems restructuring local debt, pointing to the effect on domestic banks.
“Restructuring domestic debt is like surgery — you only do it in case you must, and you prevent it if it might do more harm than good, ” officials at the IMF said in a post in December.
Sajith Premadasa, leader of Sri Lanka’s major opposition party, upon Friday met along with Wickremesinghe, who previously this week reiterated a call for the formation of an unity federal government to help the country from its crisis.
“Held far reaching discussions with the president together with my team, inch Premadasa wrote on Twitter.
“Positive about joining forces with regard to the country. Shall do so without ministerial opportunities, perks and privileges. ”