31 August 2020 12:00 am
By Kelum Bandara
The government will introduce a debt management criterion based on three main pillars – reduction of debt burden, extension of period for repayment and lowering debt servicing cost, a Minister said yesterday.
State Minister of Finance, Capital Markets Development and Public Enterprise Reforms Ajith Nivard Cabraal told Daily Mirror that he would initiate work in this regard.
Sri Lanka’s total debts stand at Rs.14 trillion, and external borrowings account for half of it. The Minister said it is 93 percent of the Gross Domestic Product (GDP) , and the plan is to reduce it to 70 percent.
The Minister underscored the need to opt for local borrowings as a way of reducing debt servicing cost and to stabilise the rupee value against the lending currencies.
“Today, currency depreciation during the term of the previous government has resulted in the increase of the rupee component of debts by Rs.1.7 trillion,” he said.