News
CBSL: Adjustments made to external debt according to international standards
It was an ‘accounting gimmick’, says Opposition MP
By Sanath Nanayakkare
The internationally accepted practice was to classify domestic debt and external debt based on the resident or non-resident status of the holder of such debt, Dr. Chandranath Amarasekara, the Director Economic Research at the Central Bank told The Island yesterday.
Dr. Amarasekera said so when he was asked to explain why the Central Bank had decided to reclassify US$ 2.2 billion worth of international sovereign bonds held by local entities as domestic debt.
“We did not have accurate information on ISB holdings by the resident/non-resident status of the holder, and accordingly a new survey was commenced in 2020 to collect this information, and this survey is continued on a monthly basis. According to the survey, ISB holdings of resident banks was around USD 1.1 billion at end 2019, which increased to over USD 2.2 billion by end 2020. With this new information, adjustments were made to external debt for 2019 and 2020. This does not mean that they are not shown in total government debt. The total gets the same treatment, while this was only a reclassification within the given total, where the entire ISB liability at face value of USD 15.05 billion at end 2019 and USD 14.05 billion at end 2020 are included in the outstanding government debt. Nevertheless, the international norm of reporting ISB liabilities at market value has been continued in relation to external statistics, as practiced in the past.” he explained.
When asked whether these sovereign bonds now shown in the books as domestic debt are going to be repaid in rupees, Dr. Amarasekara denied it saying, “Definitely not. This is similar to Sri Lanka Development Bonds which are mostly held by resident entities being repaid in US dollars. Also, it is the same with foreign currency loans taken by the government in USD from offshore banking units of local banks. They are also repaid in US dollars. In addition, we have continued to report non-resident holdings of Rupee denominated Government Securities as external debt although they are repaid in Rupees.”
The Island posed those questions to the Director of Economic Research of the Central Bank as Opposition MP Dr. Harsha de Silva questioned on Friday as to how Sri Lanka’s foreign debt stock was reduced suddenly.
“In fact, a big accounting gimmick has been performed this time. The Central Bank Annual Report states that ISBs to be repaid by Sri Lanka are about US$ 14.1 billion. Out of this, US$ 2.2 billion worth of sovereign bonds were bought by local entities like banks in the secondary market this year. Through an accounting gimmick, these ISBs have been accounted as domestic debt instead of foreign debt and thus it has been taken away from the foreign debt stock. But therein lies the hitch; to whomever it is to be repaid, it has to be settled in US dollars,” Dr. De Silva argued.
According to the Central Bank’s Annual Report, out of outstanding US$ 14,050 million of ISBs issued, US$ 2,230 million was held by domestic entities by end 2020, up from 1,113 million in 2019.
News
Senior citizens above 70 years to receive March allowances on Thursday (26)
The Welfare Benefits Board has announced that the March allowance for senior citizens over 70 years of age will be credited to each beneficiaries account on Thursday (26th).
693,801 senior citizens over the age of 70 years are set to benifit under this welfare scheme
News
CEB Engineers warn public to be prepared for power cuts after New Year
A looming power crisis is casting an ominous shadow over the country, with engineers warning that the current “no power cut” situation may not last beyond the Sinhala and Tamil New Year due to worsening diesel shortages and ongoing coal-related disruptions.
A senior electrical engineer, attached to the Ceylon Electricity Board Engineers Union, cautioned that while authorities appear to be managing the system for now, the underlying fuel constraints are reaching a critical point.
He told The Island: “At the moment, there are no scheduled power cuts across the country. But this is being maintained under significant strain. With the diesel shortage and unresolved coal issues, sustaining uninterrupted supply, beyond the New Year period, will be extremely challenging.”
The engineer noted that thermal power generation — particularly diesel-based plants — has become increasingly difficult to sustain due to limited fuel stocks and logistical bottlenecks. At the same time, the substandard quality coal supply issues that have plagued recent shipments continue to undermine the efficiency of base-load generation.
“We are stretching available resources to avoid immediate outages. owever, unless there is a rapid improvement in fuel availability, the system will be forced into load shedding soon after the New Year,” he warned.
According to him, authorities are likely to delay any scheduled outages until after the festive season to avoid public backlash and economic disruption during a traditionally sensitive period.
“Most probably, they will try to continue like this until the New Year. But after that, daytime or peak-time load shedding becomes almost inevitable if the situation remains unchanged,” he added.
Energy analysts say the warning reflects a deeper structural vulnerability within the power sector, where over-reliance on imported fossil fuels — particularly diesel and coal — continues to expose the system to external shocks and procurement failures.
The recent use of substandard coal has already resulted in reduced generation capacity at the country’s sole coal power plant at Norochcholai, compounding the pressure on thermal plants to bridge the shortfall. Engineers say this has forced operators to depend more heavily on costly diesel generation — an option now constrained by supply shortages.
Industry sources indicate that demand is also on the rise, particularly during night peak hours, possibly driven by increased reliance on electricity for cooking, amid gas shortages, further tightening the supply-demand balance.
Despite the absence of official announcements, insiders suggest contingency planning for load shedding is already underway.
“If the fuel situation does not improve within the next few weeks, controlled power cuts will be the only viable option to protect the grid from a total system failure,” the engineer stressed.
The warning comes at a time when the country is attempting to maintain economic stability following successive crises, with uninterrupted power supply considered critical for industry, commerce, and daily life.
However, unless urgent corrective measures are taken to secure reliable fuel supplies and stabilise generation capacity, the return of power cuts — including during daytime hours — appears increasingly unavoidable, an expert said.
By Ifham Nizam
News
Japanese boost to Sri J’pura Hospital, an outright gift from Tokyo during JRJ rule
Japanese Ambassador to Colombo, Akio Isomata, on 24 March, handed over the newly established dental unit and 4D Angio CT suite at Sri Jayewardenepura General Hospital. Health Minister Dr. Nalinda Jayatissa and other senior officials from the Ministry of Health and the hospital attended the event.
Highlighting the strong partnership between Japan and Sri Lanka in the health sector, the Embassy issued the following press release yesterday: “This handover marks the second phase of the project, following the initial provision of ophthalmic equipment in December 2023. The current phase represents a significant milestone, featuring the introduction of a state-of-the-art CT Angiography system – the first of its kind in South Asia – as well as dental units. These contributions are expected to enhance Sri Lanka’s capacity to address non-communicable diseases (NCDs), including cancer, stroke, and diabetes, thereby saving lives, reducing long-term complications, and improving the quality of life of patients.
The CT Angiography system integrates CT scanning and angiography functions, enabling highly accurate and timely diagnosis and treatment. It is expected to further strengthen the hospital’s role as a key medical hub in Sri Lanka and the wider region.
In addition, the provision of 10 dental units will support the establishment and enhancement of dental services at the hospital. In Japan, oral health is considered closely linked to overall health and plays an important role in extending healthy life expectancy. This support is, therefore, also expected to contribute to the promotion of preventive healthcare in Sri Lanka.
The Sri Jayewardenepura General Hospital was constructed in 1984 with grant assistance from the Government of Japan. The well-known “1001-bed” story—originating from former President J.R. Jayewardene’s remark to add one more bed to the originally planned 1,000—remains a memorable episode reflecting the history of this cooperation.
Japan has consistently supported Sri Lanka’s health sector over the decades, including the development of medical facilities, strengthening of blood supply systems, and support during the COVID-19 pandemic through vaccine delivery assistance. Furthermore, during Sri Lanka’s recent economic crisis, Japan provided fuel essential for maintaining healthcare services, and in times of natural disasters, dispatched emergency medical teams to deliver urgent care. These efforts demonstrate Japan’s continued commitment to standing by Sri Lanka, especially in times of need. These efforts reflect Japan’s commitment to “investment in people” and “human security,” supporting a healthcare system in which all individuals can live healthy and dignified lives.

Japanese Ambassador Isomata with Minister Dr Jayatissa and officials (pic courtesy Japanese Embassy)
Ambassador Isomata remarked, “This support is not merely for the provision of equipment, but also for the consolidation of the foundation for safeguarding lives and livelihoods. Sri Jayewardenepura General Hospital, built with the support of Japan, stands as a symbol of the longstanding friendship between our two countries. We sincerely hope that this project will contribute to building a sustainable healthcare system that benefits future generations in the field of medicine and further strengthen our partnership.”
Minister Jayatissa highlighted,” This is not just a donation of machines. It is an investment in the lives and futures of our patients. By establishing this modern dental unit, we are addressing a critical need in the prevention and treatment of oral diseases for our population. I wish to express our deepest gratitude to the Government and people of Japan for this generous assistance. These are acts of true friendship, and the people of Sri Lanka will always remember them with gratitude.”
Japan will continue to work closely with Sri Lanka to further strengthen the healthcare sector and deepen the longstanding friendship between the two countries.”
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