Yesterday, President Ranil Wickremesinghe informed Parliament that Sri Lanka owed USD 37 billion in foreign debt. “Sri Lanka’s external debt currently totals $37 billion, which includes $10.6 billion in bilateral credit and $11.7 billion in multilateral credit,” the president stated in a special statement. Of the $14.7 billion in commercial debt, $12.5 billion are sovereign bonds. The goal of the debt restructuring is to make the debt manageable and free up money for public services.
He declared that Sri Lanka was one of the first middle-income countries to start debt restructuring using the new framework for debt sustainability analysis, which was created especially for these kinds of countries. According to the President, a debt repayment agreement was reached with Sri Lanka’s official creditors on June 26. On behalf of Sri Lanka, the agreements had been approved by the Cabinet.
“President: Sri Lanka owes USD 37 billion in foreign debt.”
The President outlined the specifics of the agreements made with the official creditor committee on debt restructuring, which is co-chaired by France, India, Japan, and China Exim Bank. He pointed out that the agreements include an extension of the principal repayment grace period until 2028. He said that a full debt repayment grace period was extended until 2043 and that interest rates have been kept at or below 2.1%.
The Head of State further stated that the principal loan amount can be gradually increased for repayment, deferring debt servicing costs, in accordance with the agreements reached on debt restructuring He stated that Sri Lanka will still need to pay USD 5 billion in debt.
