Government settles US$ 1,909.7 million foreign debt and interest – Rajith Keerthi Thennakoon
Rajith Keerthy Tennakoon Director General of Community Affairs at the President’s Office delivering a special media statement today (05) stated that between the assumption of office by President Ranil Wickremesinghe and February 2024, the Government of Sri Lanka has settled a total of US$ 1909.7 million in foreign debt and interest payments.
He also highlighted that from July 21, 2022, to February 2024, the government has disbursed $1338.8 million in multilateral loans and interest, and that there were no outstanding arrears in loan installments or interest payments up to February 2024.
He said that according to the Department of External Resources, payments totaling US$ 760.1 million have been made to the Asian Development Bank and US$ 7.0 million to the Asian Infrastructure Investment Bank. Additionally, payments of US$ 22.3 million have been made to the European Investment Bank, US$ 17.9 million to the International Fund for Agricultural Development, and US$ 9.8 million to the EFF 23-26 program of the International Monetary Fund. Furthermore, US$ 1.7 million has been disbursed to the Nordic Development Fund, US$ 29.9 million to the OPEC Fund for International Development, and US$ 489.9 million to the World Bank. Consequently, the government’s total payments for loans and interest amount to US$ 1,338.8 million.
It is noteworthy that the Asian Development Bank, the International Monetary Fund, and the World Bank have extended further financial support to the government due to its commendable track record in debt repayment. During this period, negotiations are underway with relevant states and institutions to finalize agreements regarding the repayment of bilateral loans and interest, which currently stand at US$ 571.0 million.
Additionally, preliminary agreements have been reached concerning debt and interest payments, involving members of the Paris Club, with outstanding interest to be settled by the end of February 2024 amounting to $450.7 million.
Tennakoon said that it is worth noting that several countries, including Japan, have provisionally agreed to resume numerous projects halted in the past
Moreover, bilateral loan transactions have been conducted with nearly 25 other financial institutions, such as Canada, China, France, Germany, India, Japan, South Korea, Kuwait, Pakistan, Russia, Spain, the United States, China Development Bank, Sino-Hungarian Bank, Indian Exim Bank, and American Exim Bank.
These loans and interest payments have been denominated in US Dollars, Euros, Japanese Yen, and Canadian Dollars. The Central Bank of Sri Lanka has bolstered its dollar reserves in foreign currencies to facilitate local payments to institutions like People’s Bank, Bank of Ceylon, and Hatton National Bank after settling local debt and interest obligations.
Furthermore, following the repayment of multilateral, bilateral, and local dollar loans, the country’s cash reserves have surged to over $4.9 billion ($4950 million). The government is actively engaged in restructuring business loans and interest totaling $4,439.2 million, acquired at high-interest rates. It is important to note that payment of these funds will be deferred until negotiations regarding debt restructuring are finalized.
He reiterated that the ongoing discussion regarding the special interest rate offered for fixed deposits of senior citizens warrants attention.
(PMD)
