• Latest
  • Trending
Sri Lankan Ministry of Finance

Lanka urged to seek the help of India and Japan for debt management  

March 7, 2022
Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

January 30, 2023
The Mughals gave India the concept of a “pleasure garden” 

The Mughals gave India the concept of a “pleasure garden” 

January 30, 2023
Maldivian President Solih’s controversial win in party primary ahead of Presidential poll

Maldivian President Solih’s controversial win in party primary ahead of Presidential poll

January 30, 2023
Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

January 29, 2023
Excited fans damage theatres showing Pathaan

Excited fans damage theatres showing Pathaan

January 29, 2023
The world is tired Of United States’ wars

The world is tired Of United States’ wars

January 29, 2023
Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

January 29, 2023
Electricity

Power cut schedule for today in Sri Lanka: January 28th

January 28, 2023
Lankan envoy meets Indian Chief of Defense Staff, Gen. Anil Chauhan

Lankan envoy meets Indian Chief of Defense Staff, Gen. Anil Chauhan

January 27, 2023
Eggs

India to export 50 million eggs to Malaysia

January 27, 2023
Bangladeshi opposition slams inclusion of Darwin’s theory in school textbook

Bangladeshi opposition slams inclusion of Darwin’s theory in school textbook

January 27, 2023
Exchange Rate

Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

January 27, 2023
  • About Us
  • Advertisements
  • Privacy Policy
  • Contact
Monday, January 30, 2023
No Result
View All Result
NewsIn.Asia
  • Home
  • Around South Asia
    • All
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    The Mughals gave India the concept of a “pleasure garden” 

    The Mughals gave India the concept of a “pleasure garden” 

    Maldivian President Solih’s controversial win in party primary ahead of Presidential poll

    Maldivian President Solih’s controversial win in party primary ahead of Presidential poll

    Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

    Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

    Excited fans damage theatres showing Pathaan

    Excited fans damage theatres showing Pathaan

    Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

    Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

    Electricity

    Power cut schedule for today in Sri Lanka: January 28th

    Lankan envoy meets Indian Chief of Defense Staff, Gen. Anil Chauhan

    Lankan envoy meets Indian Chief of Defense Staff, Gen. Anil Chauhan

    Eggs

    India to export 50 million eggs to Malaysia

  • World
    • All
    • Japan
    • Russia
    • United Kingdom
    • United States
    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    The world is tired Of United States’ wars

    The world is tired Of United States’ wars

    Eggs

    India to export 50 million eggs to Malaysia

    Vaping

    Researchers uncover new negative effects of vaping

    Donald Trump

    Meta says it will restore Donald Trump’s Facebook and Instagram accounts

    Paris. Image credits - Alexander Kagan allewollenalex / Unsplash

    World’s ‘most powerful’ tourism city revealed

    "Avatar: The Way of Water" has soared into the $2 billion club of top grossing movies worldwide.

    ‘Avatar: The Way of Water’ crosses $2 billion mark in worldwide box office

    Pope Francis

    Pope Francis says homosexuality is not a crime

    Chris Hipkins

    New Zealand’s Chris Hipkins sworn in as Prime Minister

  • Business
  • Politics
  • Sports
  • Entertainment
    • All
    • Books
    • Gaming
    • Movie
    • Music
    • Series
    "Avatar: The Way of Water" has soared into the $2 billion club of top grossing movies worldwide.

    ‘Avatar: The Way of Water’ crosses $2 billion mark in worldwide box office

    Pathaan

    Posters of Shah Rukh Khan’s Pathaan torn down and burnt outside cinemas in India

    Oscars 2023

    Oscars 2023: ‘Everything Everywhere All At Once’ leads nominations

    Much-awaited Sri Lankan 3D animation movie “Gajaman” coming to theatres

    Much-awaited Sri Lankan 3D animation movie “Gajaman” coming to theatres

    Prince William and Prince Harry arrive at the Canadian National Vimy Memorial in Vimy, France on April 9, 2017.. Image credits - Jack Taylor/Getty Images/File

    Prince Harry’s ‘Spare’ creates world record, becomes fastest selling non-fiction book

    Cocaine Bear (Credit: Universal Pictures)

    20 of the best films to watch in 2023

    Avatar

    Avatar: The Way Of Water passes USD 1B at the global box office

    (Image credit: Alamy)

    The 20 best films of 2022

    Harry and Meghan

    ‘Harry & Meghan’ is Netflix’s most watched documentary debut in its first week

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Science
    • Travel
    Vaping

    Researchers uncover new negative effects of vaping

    Paris. Image credits - Alexander Kagan allewollenalex / Unsplash

    World’s ‘most powerful’ tourism city revealed

    Image credits - NASA nasa / Unsplash

    Earth’s inner core may have started spinning other way

    Global citizenship and residence advisory firm Henley & Partners has released its quarterly report on the world's most desirable passports. Click on to find out which passport offers the most access in 2023. Justin Sullivan/Getty Images

    The world’s most powerful passport for 2023 revealed

    Image credits - Tetiana Bykovets tetiana_bykovets / Unsplash

    New research reveals reason why chocolate tastes so good

    NASA’s Webb telescope

    Extraterrestrial wonders: Webb Telescope detects its 1st exoplanet

    Asafoetida plant. Photo via Adobe Stock.

    The most controversial ingredient in Indian food

    Best diet for 2023 is the science-backed Mediterranean style of eating

    Best diet for 2023 is the science-backed Mediterranean style of eating

    Airport Colombo

    Sri Lanka Airport Departure / Arrival immigration cards now online

    Dear Sri Lankans, why are you so happy this Christmas? I don’t get it

    Dear Sri Lankans, why are you so happy this Christmas? I don’t get it

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Tech
    Donald Trump

    Meta says it will restore Donald Trump’s Facebook and Instagram accounts

    WhatsApp

    5 great new features coming to WhatsApp in 2023

    Binance

    Binance is now authorised in seven EU Member States and fifteen jurisdictions worldwide

    Elon Musk

    Elon Musk breaks world record for largest loss of personal fortune in history

    Microsoft

    Microsoft in talks to invest $10 bln in ChatGPT owner – Semafor

    Hackers. Image credits - Kevin Ku ikukevk / Unsplash

    Twitter hacked, 200 million email addresses leaked: Researcher

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
  • Coronavirus
  • Videos
  • Home
  • Around South Asia
    • All
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    The Mughals gave India the concept of a “pleasure garden” 

    The Mughals gave India the concept of a “pleasure garden” 

    Maldivian President Solih’s controversial win in party primary ahead of Presidential poll

    Maldivian President Solih’s controversial win in party primary ahead of Presidential poll

    Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

    Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

    Excited fans damage theatres showing Pathaan

    Excited fans damage theatres showing Pathaan

    Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

    Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

    Electricity

    Power cut schedule for today in Sri Lanka: January 28th

    Lankan envoy meets Indian Chief of Defense Staff, Gen. Anil Chauhan

    Lankan envoy meets Indian Chief of Defense Staff, Gen. Anil Chauhan

    Eggs

    India to export 50 million eggs to Malaysia

  • World
    • All
    • Japan
    • Russia
    • United Kingdom
    • United States
    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

    The world is tired Of United States’ wars

    The world is tired Of United States’ wars

    Eggs

    India to export 50 million eggs to Malaysia

    Vaping

    Researchers uncover new negative effects of vaping

    Donald Trump

    Meta says it will restore Donald Trump’s Facebook and Instagram accounts

    Paris. Image credits - Alexander Kagan allewollenalex / Unsplash

    World’s ‘most powerful’ tourism city revealed

    "Avatar: The Way of Water" has soared into the $2 billion club of top grossing movies worldwide.

    ‘Avatar: The Way of Water’ crosses $2 billion mark in worldwide box office

    Pope Francis

    Pope Francis says homosexuality is not a crime

    Chris Hipkins

    New Zealand’s Chris Hipkins sworn in as Prime Minister

  • Business
  • Politics
  • Sports
  • Entertainment
    • All
    • Books
    • Gaming
    • Movie
    • Music
    • Series
    "Avatar: The Way of Water" has soared into the $2 billion club of top grossing movies worldwide.

    ‘Avatar: The Way of Water’ crosses $2 billion mark in worldwide box office

    Pathaan

    Posters of Shah Rukh Khan’s Pathaan torn down and burnt outside cinemas in India

    Oscars 2023

    Oscars 2023: ‘Everything Everywhere All At Once’ leads nominations

    Much-awaited Sri Lankan 3D animation movie “Gajaman” coming to theatres

    Much-awaited Sri Lankan 3D animation movie “Gajaman” coming to theatres

    Prince William and Prince Harry arrive at the Canadian National Vimy Memorial in Vimy, France on April 9, 2017.. Image credits - Jack Taylor/Getty Images/File

    Prince Harry’s ‘Spare’ creates world record, becomes fastest selling non-fiction book

    Cocaine Bear (Credit: Universal Pictures)

    20 of the best films to watch in 2023

    Avatar

    Avatar: The Way Of Water passes USD 1B at the global box office

    (Image credit: Alamy)

    The 20 best films of 2022

    Harry and Meghan

    ‘Harry & Meghan’ is Netflix’s most watched documentary debut in its first week

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Science
    • Travel
    Vaping

    Researchers uncover new negative effects of vaping

    Paris. Image credits - Alexander Kagan allewollenalex / Unsplash

    World’s ‘most powerful’ tourism city revealed

    Image credits - NASA nasa / Unsplash

    Earth’s inner core may have started spinning other way

    Global citizenship and residence advisory firm Henley & Partners has released its quarterly report on the world's most desirable passports. Click on to find out which passport offers the most access in 2023. Justin Sullivan/Getty Images

    The world’s most powerful passport for 2023 revealed

    Image credits - Tetiana Bykovets tetiana_bykovets / Unsplash

    New research reveals reason why chocolate tastes so good

    NASA’s Webb telescope

    Extraterrestrial wonders: Webb Telescope detects its 1st exoplanet

    Asafoetida plant. Photo via Adobe Stock.

    The most controversial ingredient in Indian food

    Best diet for 2023 is the science-backed Mediterranean style of eating

    Best diet for 2023 is the science-backed Mediterranean style of eating

    Airport Colombo

    Sri Lanka Airport Departure / Arrival immigration cards now online

    Dear Sri Lankans, why are you so happy this Christmas? I don’t get it

    Dear Sri Lankans, why are you so happy this Christmas? I don’t get it

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Tech
    Donald Trump

    Meta says it will restore Donald Trump’s Facebook and Instagram accounts

    WhatsApp

    5 great new features coming to WhatsApp in 2023

    Binance

    Binance is now authorised in seven EU Member States and fifteen jurisdictions worldwide

    Elon Musk

    Elon Musk breaks world record for largest loss of personal fortune in history

    Microsoft

    Microsoft in talks to invest $10 bln in ChatGPT owner – Semafor

    Hackers. Image credits - Kevin Ku ikukevk / Unsplash

    Twitter hacked, 200 million email addresses leaked: Researcher

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
  • Coronavirus
  • Videos
NewsIn.Asia
No Result
View All Result
Home Economy

Lanka urged to seek the help of India and Japan for debt management  

Editor by Editor
March 7, 2022
in Economy, India, Japan, Sri Lanka
Reading Time: 6 mins read
21 1
A A
Sri Lankan Ministry of Finance

Sri Lankan Ministry of Finance

28
SHARES
Share on WhatsApp

By P.K.Balachandran

Colombo, March 6 (newsin.asia):   The Sri Lankan think tank Pathfinder Foundation has strongly recommended that the Lankan government urgently go in for debt restructuring and bridge financing given the fact that there is an acute foreign exchange shortage and the country has to repay loans amounting to US$ 6.9 billion this year alone.  

The report was based on an in-depth discussion by a team of experts from three countries, India, Japan, and Sri Lanka, on the current financial crisis faced by Sri Lanka. The study group’s recommendations are to be presented to the three governments viz. India, Japan, and Sri Lanka for debt restructuring and bridge financing to address the economic crisis.

ADVERTISEMENT

Subscribe to our Telegram channel for the latest updates from around the world

The report noted that Sri Lanka’s foreign exchange reserves are at dangerously low levels ($1.6 billion or less than one month of imports), especially given the U$ 6.9 billion in debt service payments due in 2022.  The acute shortage of foreign exchange is due to the COVID-19 pandemic, causing a sharp decline in tourism earnings, and reduced overseas worker’s remittances. It has also disrupted Sri Lanka’s own efforts to improve the debt sustainability.

It further noted that the International Sovereign Bond payment (US$ 500 million) on 18th January 2022 was made possible only through the very timely SWAP (US$ 400 million) from the Reserve Bank of India and the deferral of a payment (US$ 500 million) to India under the Asian Clearing Union (ACU). 

READ: Sacked Lankan minister calls Finance Minister Basil Rajapaksa as an “Ugly American”

“Both of these are short-term interventions. The former is a three-month facility, which can be renewed twice (i. e. nine months) before the requirement of at least a staff-level agreement with the IMF.  The ACU payment has been deferred for two months (now due in March 2022).  Without this much needed support from India, Sri Lanka would have defaulted on the recent ISB payment and triggered an economic and humanitarian crisis,” the report said.  

Painting a grim picture, the report said that the low level of reserves is leading to shortages of imports that are causing, on top of the COVID-19 pandemic, additional hardship to everyday Sri Lankans.  People stand in long lines for cooking gas; powdered milk is unavailable; power cuts are frequent; medicines are becoming difficult to find, while the cost of staple food items are sky rocketing.

READ: Covid victims burials allowed at any cemetery or burial ground in Sri Lanka

Identifying the “real problem” the report said that Sri Lanka’s external debt is “unsustainable.”  It pointed out that the revenue that the government will earn, even under the most optimistic scenarios, will be insufficient to cover public expenditures and meet debt service payments over the coming years.  Known external debt repayments over the next five years amount to US$ 26 billion, or about US$ 5 billion a year, which is over 80 % of government revenue in 2020.

The report recalled that when in 2019, Sri Lanka cut taxes and experienced a drop in tax revenues, the three major rating agencies downgraded the country to C, which is near-default level.  In January of this year, when the Governor of the Central Bank announced that Sri Lanka had secured the funds to meet the US$ 500 million bond payment, S&P downgraded Sri Lanka further!

READ: Ukraine crisis risks pushing Sri Lanka closer toward default

Sri Lanka should not continue meeting its debt-service payments in full—and starving its people of essential imports–when everybody, including market participants, knows that the country cannot sustain this strategy, the report said.

Debt Management

Suggesting a way out, the report said: “The only choice is for Sri Lanka to undertake a managed debt restructuring, whereby the country reaches an agreement with its creditors to reduce the overall debt to a sustainable level.  The process begins with the appointment of financial and legal advisors.  The restructuring is greatly facilitated by approaching the IMF for support on two items.  First, the IMF can undertake the analysis to determine the sustainable level of debt.  This analysis serves as an anchor for the negotiations with the creditors.  Secondly, if Sri Lanka has a program with the IMF, that increases investors’ confidence that the new debt level is sustainable. It could also lead to additional resources from the IMF, the World Bank, Asian Development Bank and other partners.”

READ: Sri Lanka to go digital — A comprehensive road map to drive #DigitalSriLanka

According to the report, these negotiations are likely to take about six months.

Bridging Finance

Btu in the meantime, there is urgent need for “bridging finance” to meet the severe shortfall in USD liquidity over this period.  Failure to mobilize this bridging finance will lead to severe shortages of food, fuel and pharmaceuticals, causing a great deal of hardship and possibly social unrest, pushing individuals to leave the country through legal and illegal channels.

The Foundation suggests that with the initiation of debt restructuring negotiations, debt servicing would be suspended, so the requirements would be US$ 3.5 billion per semester. 

READ: Sri Lanka shares plunge 5% as economic crisis worsens

“There is a possibility that Sri Lanka will receive a US$ 1 billion SWAP from a national government and an additional US$ 0.5 billion of usable reserves from a private entity but these have not been confirmed.  In the absence of these inflows, there is a financing gap of US$ 3.5 billion over the next six months, which should be filled to avert a humanitarian disaster. While the above is admittedly an estimate, the governments of Sri Lanka, Japan and India could agree on a figure that can be reviewed on a quarterly basis.”

“The government of Sri Lanka, along with Japan and India as major development partners, can collaborate on a program of debt restructuring and bridge financing in the following way: The Government of Sri Lanka initiate a managed debt restructuring by appointing the financial and legal advisors.  The Government approaches the IMF for assistance with the debt restructuring.”

Japan and India can give Bridge Financing

Following the initiation of the debt restructuring, the government of Sri Lanka requests the Governments of Japan and India to provide impetus to the restructuring exercise and develop programs for providing bridge financing to Sri Lanka during the negotiations.  The bridging finance could take the form of humanitarian assistance through lines of credit to support essential imports. These will be one-time financial transfers, which will end with the conclusion of the debt restructuring negotiations.

Japan and India should encourage the international community to apply to Sri Lanka’s case the principles of G-20 Common Framework as well as the Debt Service Suspension Initiative (DSSI) for lower income countries.

Under current policies, Sri Lanka will not regain access to international capital markets for at least another 18 months.  The problems have been amplified by the decline in remittances from US$ 7.1 billion in 2020 to US$ 5.5 billion last year. However there is a silver lining: Tourism earnings are expected to recover from US$ 261 million in 2021. They were US$ 4.3 billion in 2018, the report noted. 

END

For similar articles, join our Telegram channel for the latest updates. – click here

Tags: Bridge fianancingDebt ervicingForex crisisIndiaSri Lanka

Related Posts

Gandhi’s influence on Sri Lanka’s non-violent Independence struggle
India

Gandhi’s influence on Sri Lanka’s non-violent Independence struggle

January 30, 2023
The Mughals gave India the concept of a “pleasure garden” 
Culture

The Mughals gave India the concept of a “pleasure garden” 

January 30, 2023
Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy
Defense

Jaishankar’s visit reset bilateral relations, says Sri Lankan envoy

January 29, 2023
Excited fans damage theatres showing Pathaan
Cinema

Excited fans damage theatres showing Pathaan

January 29, 2023
Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate
Development news

Lanka informed by IMF that Chinese proposal on debt restructuring is not adequate

January 29, 2023
Electricity
Around South Asia

Power cut schedule for today in Sri Lanka: January 28th

January 28, 2023
  • Electricity

    Power cut schedule for today in Sri Lanka: January 28th

    57989 shares
    Share 23214 Tweet 14490
  • Registration open for National Fuel Pass

    6624 shares
    Share 2687 Tweet 1641
  • Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

    1664 shares
    Share 672 Tweet 413
  • WATCH : Yohani’s first live performance in India

    788 shares
    Share 328 Tweet 192
  • Power interruption schedule released: Check your area power cut time

    747 shares
    Share 325 Tweet 176
  • About Us
  • Advertisements
  • Privacy Policy
  • Contact

© 2022 All rights reserved.

No Result
View All Result
  • Home
  • Around South Asia
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
  • Around The World
  • Breaking News
  • Business
    • Exchange
  • Climate Change
  • Governance
    • Crime
    • Diplomacy
    • Defense
    • Human Rights
    • Politics
    • Strategic Affairs
  • Lifestyle
    • Books
    • Entertainment
      • Arts
      • Cinema
      • Gaming
      • Music
      • Movie
      • Series
      • TV
    • Health
    • Fashion
    • Food
    • Travel
  • Culture
    • Ethnicity
    • Gender
  • Development news
  • Economy
  • Education
  • Environment
  • Coronavirus
  • History
  • National
  • Offbeat
    • Media
    • Music and arts across South Asia
  • Recommended
    • Headlines
    • Highlights
    • Top Picture
    • Top Story
  • Religion
  • Science
  • Sports
    • Football
    • Cricket
      • LPL
      • IPL
    • Tennis
    • Formula 1
    • NBA
  • Tech
    • Instagram
  • United Nations
  • Weather
  • World
    • Japan
    • Russia
    • United States
  • Videos

© 2022 All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

eskisehir escort -

https://www.vudols.com/

- Sağlık Personeli - mersin escort - Antalya korsan taksi