IMF-led debt restructuring process is less painful – CBSL Ex-Governor

By Ishara Gamage | Published: 2:00 AM Dec 7 2021
FT IMF-led debt restructuring process is less painful  – CBSL Ex-Governor

By Ishara Gamage

The Sri Lankan Government should take steps to resolve its prevailing balance of payments crisis in a manner that has a minimal impact (less painful way) on the economic and social affairs of the Country, former Governor of the Central Bank of Sri Lanka (CBSL) Dr. Indrajit Coomaraswamy said yesterday (6). 

He said the CBSL should look at the next best option if its recent six-month roadmap is not practical.

He also pointed out that it would be more effective to focus on a debt restructuring process led by the International Monetary Fund (IMF).

Addressing an economic forum he said that Sri Lanka has external stresses, which are usually driven by budget deficits and monetary forbearance.

He said the Central Bank’s role as the agent which raised debt for the Government should not be subordinated to its core objectives.

Dr. Coomaraswamy said the CBSL needed more independence to achieve its core objectives. At the moment, economic and price stability are its primary or core objectives.

According to him, there are opportunities for Sri Lanka to use its location and living standards to attract foreign investment and grow exports.

He also emphasised that economic reforms were essential to move the country forward.

He said that public enterprises in Sri Lanka, including energy pricing, were areas to be addressed.

By Ishara Gamage | Published: 2:00 AM Dec 7 2021

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