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Last Updated : 2024-05-19 11:52:00
Dr. Nandalal Weerasinghe PIC BY KITHSIRI DE MEL |
By Shabiya Ali Ahlam
It is essential for Sri Lanka to ensure it goes ahead with the current reform efforts, else it runs the risk of having to face another Domestic Debt Optimisation (DDO) exercise, the Central Bank cautioned yesterday.
“If Sri Lanka doesn’t continue to remain on track, there could be a second DDO. But we don’t need another DDO since the current one is strong and consistent with the expectations,” said Central Bank Governor Dr. Nandalal Weerasinghe.
He shared his views while presenting the keynote at the CEO forum organised by the Sri Lanka Chapter of Chartered Financial Analysts (CFA).
End of June, Sri Lanka announced the proposed DDO arrangement. Dr. Weerasinghe stressed this was done after a “careful analysis” of all possible options available.
“The proposed plan would be the optimum solution with the least burden on the citizenry,” he stressed while reiterating that the Central Bank remains committed to ensuring the stability of the banking system while also ensuring the well-being of the Employees’ Provident Fund.
Dr. Weerasinghe shared that going forward, the key expected outcomes of both the DDO process and restructuring of foreign debt is the reduction of the gross financing need to below 13 percent of GDP, over the period 2027-2032 and removal of public debt to below 95 percent of GDP during the same timeframe.
Now that the DDO process is underway, the Central Bank is actively working with the government to establish macroeconomic stability, as envisaged in the broader macroeconomic framework agreed upon under the International Monetary Fund Extended Fund Facility, he said, outlining the next course of action.
“With the debt restructuring, fiscal consolidation and reforms to state-owned enterprises underway, it is expected that the government borrowing in the medium term will reduce while the availability of credit for private sector investment will improve, thereby having a positive growth impact,” said Dr. Weerasinghe.
In turn, economic growth is essential in the post-debt restructuring period, as it affects the ability of a country to pay its debt obligations, even after restructuring, he added. Further, Dr. Weerasinghe pointed out that the 2023 borrowing limit is not to further borrow but to pave the way for the DDO.
Disappointed Saturday, 22 July 2023 07:30 AM
Are you ready to lose your money? You printed money and that pushed the INFLATION.
Senior citizen Saturday, 22 July 2023 08:59 AM
SIR : PLEASE HELP SENIOR CITIZENS WITH A BETTER RATE OF INTEREST SO THAT WE CAN LIVE A DECENT LIFE - WE ARE SUFFERING
Ram Saturday, 22 July 2023 10:58 AM
In my mind RW and his team that includes many public servants portray false image of Sri Lanka to the world
Ram Saturday, 22 July 2023 03:03 PM
Nande, Has the government and you been honest in providing updates in the recent past? Soon you will hear the falsehoods you uttered for the government to be in power
Sam Silva Saturday, 22 July 2023 05:37 PM
Your false information is good to fool the public. Our rupee is continuing to depreciate daily and we are not paying our loans but taking more loans. Even to make it worse, we have relaxed our imports but our exports at minimum. Explain how you are going to improve our country economy.
Does the Nandalal threatening to harm EPF more Sunday, 23 July 2023 10:22 PM
Central Bank Governor is the biggest anti-Sri Lankan now. He is trying to ruin the lives of older people by his cap on interest rates on the superannuation funds run by the Central Bank. He is like the fox in the hen house. Thoroughly corrupt, conflict of interest fellow destroying the future of Sri Lankans.
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