New Delhi: “It has come to a point that making debt payments is challenging and impossible. The best action that can be taken is to restructure debt and avoid a hard default,” Central Bank Governor P. Nandalal Weerasinghe told reporters, according to Reuters.
Weerasinghe, who assumed office last week, said: “We need to focus on essential imports and not worry about servicing external debt.”
The minister also said the move was temporary until an agreement was reached with creditors.
Sri Lanka govt releases interim policy regarding the servicing of country's external public debt pic.twitter.com/90aNMW0KRX
— ANI (@ANI) April 12, 2022
The country’s foreign reserves have depleted to $1.93 billion while its debt servicing is $4 billion this year.
The country has seen severe powercuts in the last few weeks with heavy shortages in food and medical supplies.
Reuters reported Sri Lanka would start negotiations next week with the International Monetary Fund for more loans.
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