Need To Focus On Essential Imports, Cannot Worry About Servicing Debt: Lanka Bank Guv

Declaring a default on foreign debt, the governor of Sri Lanka’s central bank said the island needed to prioritise at a time of economic crisis. “We need to focus on essential imports and not have to worry about servicing external debt. It has come to a point that making debt payments is challenging and impossible,” Central Bank of Sri Lanka’s governor P Nandalal Weerasinghe said.

- Jaya Menon

Colombo: Just under half of Sri Lanka’s debt is market borrowings through international sovereign bonds and other similar instruments. Estimates showed Sri Lanka needed $7 billion to service its debt load this year, against just $1.9 billion in reserves at the end of March.

Political leaders and experts faulted the government for gross mismanagement, years of accumulated borrowing and ill-advised tax cuts. Former finance minister Eran Wikremaratne, an opposition parliamentarian, said, “There’s a huge dollar crisis and moreover this economic crisis has been preceded by a political crisis.”