Foreign debt restructuring not feasible without domestic debt restructuring – Fin. Sec.

Finance Secretary Mahinda Siriwardana says foreign debt restructuring will not be feasible without restructuring domestic debt.

Joining a special media briefing organized by the Presidential Media Centre on Thursday (June 29) to discuss the Domestic Debt Optimization (DDO), the Finance Secretary said the government prioritizes the safeguarding of both the banking system and the Employees’ Provident Fund (EPF).

Siriwardana said it is essential to disseminate information widely about these programs, particularly reaching out to impoverished individuals in remote villages who may be unaware or unable to participate actively.

As Sri Lanka has entered into a program with the International Monetary Fund (IMF), the Finance Secretary said failing to pursue debt restructuring will have repercussions on this program.

“The consequences for the future of our country under such circumstances are unimaginable. Therefore, it is vital to recognize the sensitivity of this issue and address it accordingly.”

This restructuring involves both domestic and foreign loans. Although the foreign debt restructuring program is underway, significant emphasis has been placed on prioritizing the completion of the domestic debt restructuring program in a timely manner.

The Finance Secretary went on to note the importance of taking action to educate and inform the public about the current situation. “Many questions are being raised, including concerns about the potential collapse of the banking system and the adverse impact on the country. This is a distressing situation for me personally, as the nation is facing significant challenges that are yet to be resolved. It is imperative to implement programs that can help overcome these challenges.”