Debt restructuring of USD 12.5 bn. to take place sans Parliament approval?
A special meeting to appraise the Members of Parliament on CBSL duties was held yesterday (Sep. 03) in Parliament under the patronage of Speaker – Mahinda Yapa Abeywardana.
Members of Parliament, Dr. Nandalal Weerasinghe, Governor of the Central Bank, members of the Governing Board and the Monetary Policy Board, high officials of the Central Bank including Deputy Governors, the Secretary General of the Parliament Mrs. Kushani Rohanadeera, a group of parliamentary officials were present at this meeting held.
The meeting was held by the Governor of the Central Bank, members of the Governing Body and the Monetary Policy Board, Deputy Governors of the Central Bank, in fulfillment of the legal requirement that the Parliament or a Committee should inquire into the duties performed by the Central Bank once in every four months pursuant to the provisions of Section 80 (2) (a) of the Central Bank of Sri Lanka Act, No. 16 of 2023, upon a request made by the Parliament.
However, it is reported that only a handful of MPs had attended the meeting.
Dr. Suren Raghavan, Ashoka Priyantha, Colombo District MP Premanath C. Dolawatte, Anuradhapura District MP – Weerasena Gamage, Kalutara District MP – Anupa Pasquel, MP A.H.M. Fowzie and Matara District MP – Weerasumana Weerasinghe had attended the meeting.
During the meeting, it has been revealed that a debt restructuring of USD 12.5 billion has been planned with foreign private creditors without the approval of the Parliament.
MP Weerasumana Weerasinghe had commented that this will lead to Sri Lanka having to pay a 24% interest.
In response, the CBSL governor has stated that the relevant decisions are being taken by the Finance Ministry and not the CBSL.
The Governor of the Central Bank of Sri Lanka also pointed out that the inflation in Sri Lanka has been brought down to 5% compared to the existing situation and the policy interest rate has been brought down.
The Governor further mentioned that it was possible to strengthen the rupee by stabilizing the exchange rate through the strengthening of reserves.
The Governor of the Central Bank pointed out the issues related to stabilizing the country’s financial system. He also stated that it is a point to note that the banking system in this country was prevented from collapsing, especially in the midst of the economic crisis. He also mentioned that the new Central Bank Act as well as the new laws introduced for the regulation of the banking system was beneficial. Moreover, technical matters regarding the measures taken to stabilize the financial system in this country, including the appointment of a financial system monitoring committee by the new Central Bank Act, for the stability of the entire financial system including the banking system and the non-banking financial system as well as the stock market and the insurance sector was clarified.