Sri Lanka settles Rs1B debt instalment

By Thameenah Razeek | Published: 2:00 AM Jul 29 2021

By Thameenah Razeek

Cabinet Spokesman Keheliya Rambukwella on Tuesday (27) announced that the USD 1 billion debt instalment, due on foreign loans obtained by the Government has been settled, notwithstanding the Government's economic difficulty caused by the COVID-19 pandemic. He stated that, beginning yesterday (28), the issuing of Letters of Credit (LCs) in the financial system and the importation of products will be possible without any restrictions. 

When asked whether the loan instalment was paid entirely from the country’s foreign reserves or by acquiring another foreign loan, the Cabinet Spokesman stated that they needed to make it clear that Government is maintaining foreign reserves successfully. He said, “We managed to wage a war while still controlling the cash flow and the foreign reserves at one point when the foreign reserves were down to USD 1.2 billion. 

After that, we turned over the foreign reserves in the amount of USD 8 billion, with the loans limited to 71.6 per cent of the country’s GDP.” He emphasised that while everyone continued to criticise and no one sought to submit any recommendations on how to settle the loans, the fact that the Government was able to settle the loan instalment without trouble and in a very seamless manner was significant. 

He pointed out that while the entire globe is grieving the pandemic and the global economic collapse, the Sri Lankan Government has managed to keep a cash flow in such a smart manner. “Those who claim to be economic experts from the Opposition have repeatedly stated in Parliament that the country is in a position where it will never be able to settle the loan instalment due on 26 July owing to the collapse of foreign reserves. Even the agencies that prepare Fitch Ratings were scathing on Sri Lanka’s economic problems. In this way, various allegations were levelled against us, but no one sought to make any reasonable proposals to deal with the problem,” he concluded.  

By Thameenah Razeek | Published: 2:00 AM Jul 29 2021

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