Sunday, June 23, 2024
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Sri Lanka to repay debts after six months

COLOMBO (AFP) – Sri Lanka will take at least six more months to start repaying its debts, the central bank said yesterday as the government shut schools because of fuel shortages.

Central Bank of Sri Lanka Governor Nandalal Weerasinghe said there will be no debt servicing until the country was able to restructure its USD51 billion external debt.

“We hope to be able to reach an agreement with our creditors in about six months,” Weerasinghe said. “Our position is very clear. Until they come to (a) restructure (agreement), we will not be able to pay.”

He said the mob violence and the government’s failure to finalise a finance minister under a new Cabinet could delay negotiations with creditors and the International Monetary Fund (IMF).

The governor said bailout talks with the IMF were under way, but a final agreement required approval by a finance minister the country is yet to appoint.

Prime minister Mahinda Rajapaksa resigned last week following pressure over the acute economic hardships faced by the 22 million population.

His successor Ranil Wickremesinghe has inducted only four ministers.