Ravi demands answers on ‘unlawful’ 2022 debt default

Former Finance Minister and MP Ravi Karunanayake has questioned the legality and accountability of Sri Lanka’s 2022 decision to suspend repayment of its external debt, calling on President Anura Kumara Dissanayake to clarify whether the move was made without parliamentary approval. 
Karunanayake noted that although the Central Bank and the Ministry of Finance cited depleted reserves and an inability to fund essential imports when announcing the suspension of foreign debt payments, the decision had not been sanctioned by Parliament nor taken under any existing legal framework. 
In his letter, he described the move as a unilateral executive act that raised serious constitutional, legal, and procedural concerns. 
He argued that the lack of parliamentary approval or formal notification had reshaped Sri Lanka’s economic trajectory, contributing to credit downgrades, restricted access to international capital markets, and long-term fiscal damage. 
Referring to President Dissanayake’s 2025 Budget Speech, which placed emphasis on financial accountability, he stressed the need to identify who authorised the debt standstill and to ensure that such decisions in the future are subjected to full parliamentary oversight. 
Karunanayake sought clarification on several areas, including the role played by the Central Bank Governor in April 2022, whether the Monetary Board or Cabinet had approved or formally communicated the move to Parliament, and whether the Attorney General’s advice or a Cabinet paper had been obtained beforehand. 
He also questioned the legal or constitutional basis on which the Central Bank or the Ministry of Finance acted without parliamentary sanction. 
He further asked whether any extraordinary powers had been temporarily granted to the Central Bank or the Ministry of Finance to suspend debt payments, and if the Government plans to introduce legislation to prevent similar unilateral actions in the future. 
Pointing to the IMF’s Extended Fund Facility (EFF) Agreement signed in April 2023 under then-President Ranil Wickremesinghe, Karunanayake also inquired about the measures taken to restore investor confidence and shield citizens from the economic fallout of the default. 
As such, he requested an assessment of the total economic, fiscal, human, and reputational cost of the 2022 default, including its impact on investor confidence, credit ratings, and Sri Lanka’s prolonged exclusion from global financial markets.