Connect with us

News

Lanka awaiting assurances from India, China, says Central Bank Governor

Published

on

By Meera Sirinivasan

Sri Lanka is waiting for financing assurances from its bilateral creditors, including India and China, to tap support from the International Monetary Fund (IMF), according to Central Bank Governor P. Nandalal Weerasinghe.

In September, the IMF reached a staff level agreement with Sri Lanka for a $2.9 billion package to help the island nation facing its worst economic crisis in decades. The development came months after Sri Lanka floated the rupee, opted for a preemptive default on its external debt, and increased interest rates sharply to tighten monetary policy.

However, Sri Lanka must now obtain adequate financing assurances from its creditors, for the IMF Board to approve the promised Extended Fund Facility (EFF). Colombo is desperate for the $2.9 billion not because it is a big amount — it can barely meet two months’ worth of imports — but mainly to use the IMF package to qualify for more credit internationally, as the country struggles to recover from the dreadful economic crash that pushed citizens to the streets. Spanning months, the mass protests ousted the former Rajapaksa administration. President Ranil Wickremesinghe, who was elected through a parliamentary vote, has vowed to rebuild the island’s devastated economy, while repeatedly acknowledging the enormous challenge the task entails.

Over the past few months, Sri Lanka has been in talks with China, Japan, and India — its three major bilateral creditors — to restructure the billions of dollars owed to them.  “We have shared all the information possible with our bilateral creditors, on an open, comparable, and transparent basis. Now they will have to look at it, make their decisions internally and come back to us…we hope they will do that soon,” the Governor of the apex Bank told The Hindu in an interview at his office on Tuesday. From the time the Sri Lankan government entered the provisional agreement with the IMF, India has underscored the need for “creditor equitability and transparency”, implying Colombo must not give any creditor preferential treatment while restructuring their loans.

Although Sri Lanka aimed to secure IMF relief before the end of this year it failed to, as bilateral negotiations dragged. Talks with China got a “little delayed”, Governor Weerasinghe observed, citing “internal issues” such as the Chinese Communist Party (CCP)’s national congress held in October, and “COVID-19 restrictions” in China.

But the delay in discussions with China “is not the only reason” for Sri Lanka’s inability to secure the IMF package this year, in his view. Japan, and the Paris Club of which it is a member, “know this business” [of debt restructure] as they have “been doing it for many years”, he said. “Because of that, they are more advanced in their engagement. They have done the analysis and shared it with non-Paris Club members like India and China,” Weerasinghe said, adding: “Now, it is up to them.” After the creditors provide financing assurances, it would likely take the IMF Board four to six weeks to approve the package, he said.

In addition to bilateral loans, the island nation has over the years borrowed heavily from private creditors, the country’s largest external credit source, holding nearly $13 billion of its outstanding debt, apart from multilateral agencies. The focus, however, is on bilateral creditors whose role is key for Sri Lanka to obtain crucial IMF support. Multilateral loans, taken on low-interest and over a long term, will not be restructured, and the actual negotiation with commercial creditors will commence only after the IMF programme kicks in, according to the Governor.

With Colombo’s decision to default on its $51-billion foreign debt — the Governor maintained it was a “debt standstill” as against a hard default — its subsequent move limiting imports to essentials, the nearly $4 billion Indian assistance and some repurposed funds, Sri Lanka waded through the last few months, despite unsuccessful attempts to obtain bridge financing. “We can manage without bridge financing now, that is how we have been managing since July,” Weerasinghe said. “With our export proceeds, worker remittances, and some support from the Asian Development Bank and World Bank we can manage,” he said.

The Central Bank recently said there was a “notable contraction” in merchandise trade deficit in October 2022, compared to the previous year, even as Sri Lanka’s imports continue to exceed exports by millions of dollars. “Exports will probably be coming down because global demand is also going down…and obviously that will impact imports as well.”

While Sri Lankan economists contend that the economy is still on a precarious path, the senior official sought to project a more hopeful picture, pitching earnings from tourism and remittances as “additional benefits”.  Official data showed earnings from tourism crossed over $1 billion from January to October 2022, while workers’ remittances went up to $3 billion during the period.

On how Sri Lanka planned to exit the cycle of debt going forward, Weerasinghe said Sri Lanka was looking at more “concessional, long-term loans” only from multilateral agencies. “And the relief we are expecting from other creditors is a grace period and maturity extensions so that our debt service burden in the next few years will be much lower than if we did not opt for debt restructure,” he said.  Sri Lanka has debt service commitments to the tune of $6 billion a year for the next several years. “So, what we are seeking from our creditors is some relief, so we repay this over the next 20 years rather than in the next four, five years.”

Reflecting on Sri Lanka’s past tendency in borrowings, Weerasinghe observed that it was a mistake that the country borrowed externally and spent locally, rather than use the funds to boost the country’s capacity, including in exports that would have equipped Sri Lanka to repay the loans from its own earnings. “That was the problem”, he said. (The Hindu)



Latest News

Sun directly overhead Neriyakulam, Punewa, Kebithigollewa, Pankulam and Sinhapura at about 12.10 noon today (31)

Published

on

By

The sun is going to be directly over the latitudes of Sri Lanka from  28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is overhead today (31) are Neriyakulam, Punewa, Kebithigollewa, Pankulam and Sinhapura about 12.10 noon.

Continue Reading

News

BASL takes exception to Justice Ganepola being denied a place in SC

Published

on

… highlights injustice caused to Justice R. Gurusinghe

The Bar Association of Sri Lanka (BASL) has alleged that due to the failure on the part of President Anura Kumara Dissanayake to fill the existing vacancies in the Supreme Court, a Senior Justice of the Court of Appeal, Justice Dhammika Ganepola, retired at the age of 63 without being considered for, or granted, a promotion to the Supreme Court, to which he was well entitled. The BASL pointed out at the time of Ganepola’s retirement there were four vacancies in the Supreme Court.

In a letter dated 17 August, 2026, addressed to President Dissanayake, the BASL declared that the failure to promote and recognise Ganepola’s distinguished judicial service, resulting in his retirement at the age of 63, is indeed a loss to the Judiciary.

A top BASL spokesman told The Island yesterday (30) that the Bar Council, over the weekend, had decided to release the hitherto confidential letter.

The official said that they also wanted to remind the President of his assurance given to BASL, on 12 August, 2026, that vacancies in the Supreme Court and Court of Appeal would be filled as soon as possible, within a month.

The following is the text of the BASL letter, signed by  Rajeev Amarasuriya, President, BASL, and its Secretary Nalin De Silva: “We write further to our letters dated 29th December 2025 and 30th June 2026 in relation to the above, to which we have not received any response.

We also refer to our meeting with Your Excellency on 12th August. As discussed during the meeting, there have been vacancies in the Supreme Court since May 2025, and the number of vacancies has now increased to four (04). There are also four (04) vacancies in the Court of Appeal. These are all matters we have already written to Your Excellency about.

Your Excellency informed the BASL Delegation when we met that you would be taking steps to make recommendations to fill these vacancies as soon as possible, within a month.

We write to reiterate the importance of giving due consideration to the criteria set out in our aforesaid letter dated 29th December 2025. We also wish to emphasise that, in making judicial appointments and promotions, seniority should be given due priority, in keeping with longstanding practice, until such time there are objective and defensible guidelines governing the assessment of merit.

The only justifiable departure to this criterion would be where there exists a specific and recognized demerit in respect of the particular Judge concerned or such other known compelling circumstances that are objectively identifiable such as where a Judge has previously been overlooked for promotion unfairly or conversely, where a Judge has been unfairly previously granted promotions above others.

This approach will safeguard both the integrity of the Judiciary and the trust reposed in it by the public.

Further, while there has been considerable discussion and representation by the Government regarding the importance of retaining experienced judges, as reminded to Your Excellency at our said meeting that, only a few months ago on 8th May 2026, a Senior Justice of the Court of Appeal, Justice Dhammika Ganepola, retired at the age of 63 without being considered for, or granted, a promotion to the Supreme Court, to which he was well entitled, and in which there were four vacancies at the time.

The failure to promote and recognise his distinguished judicial service, resulting in his retirement at the age of 63, is indeed a loss to the Judiciary.

We also drew Your Excellency’s attention at the said meeting to the fact that the Senior-most Justice of the Court of Appeal, Justice R. Gurusinghe, who joined the Judicial Service in 1996, who also Acted in the Office of President of the Court of Appeal (appointed by Your Excellency) on 11th May 2026, is due to retire at the end of this month. In fact, we learnt through the Media that Her Ladyship then Chief Justice Justice Murdu Fernando, PC, had previously in July 2025 recommended to Your Excellency the promotion of Justice R. Gurusinghe to the Supreme Court, but the same is pending from that time.

 He too is well deserving of promotion to the Supreme Court and has already been recommended by the former Chief Justice, and his case must also receive due and urgent consideration before his impending retirement.

We hope that Your Excellency will take due note of and give due regard to the concerns of the Bar, as well as to the established principles, practices and conventions governing judicial appointments, when taking steps to fill these vacancies.

On this, Your Excellency is already open to the accusation that these vacancies have been kept open, to fill with favourites of the Government which is yet another serious indictment on the independence of the judiciary which accusation would be confirmed if recommendations are made outside established practice.

Moreover, the BASL expresses grave concern that withholding promotions of Judicial Officers for extended periods of time places undue pressure on Judicial Officers in the discharge of their duties and constitutes both directly and indirectly, interference with the independence of the Judiciary, in addition to the strain obviously caused to the dispensation of justice in other Courts and the stifling and delay of career progression of Judges legitimately entitled to promotions.

We do hope that Your Excellency would take due note and cognizance of the foregoing when effecting these judicial promotions which have been long overdue and which have already adversely impacted the efficiency and effectiveness of the administration of justice.”

The BASL has copied the letter to Prime Minister Dr. Harini Amarasuriya, Speaker Dr. Jagath Wickremaratne, Opposition Leader Sajith Premadasa and all members of the Constitutional Council.

Continue Reading

News

Sajith challenges govt. to hold PC polls

Published

on

Sajith

Opposition Leader Sajith Premadasa on Saturday (29) challenged the government to hold the long-delayed Provincial Council elections, saying the polls would provide an opportunity to gauge the level of public support enjoyed by the administration.

Addressing a farmers’ meeting in Tissamaharama, Hambantota, Premadasa also criticised the latest Rs. 17 per kilogram increase in wheat flour prices, warning that it would push up the prices of bread, bakery products and other flour-based food items and place further pressure on households already struggling with the rising cost of living.

He said Sri Lanka ranked 120th among 130 countries in an international comparison of minimum wages, arguing that wages remained inadequate to meet the escalating cost of living.

Premadasa also questioned official assessments of living standards, asking whether a person could survive for an entire month on Rs. 17,315, a figure he attributed to the Department of Census and Statistics.

He claimed that between 30 and 40 percent of the population was living in poverty and called for a clear programme to help affected families improve their economic conditions.

Turning to the proposed 22nd Amendment to the Constitution, which seeks to increase the retirement age of superior court judges, the Opposition Leader accused the government of attempting to undermine judicial independence and interfere with democratic institutions.

He also criticised the government’s handling of poverty, employment, agriculture, healthcare and investment, saying more effective measures were needed to provide relief to people facing economic hardships.Premadasa called for stronger policies to attract foreign direct investment and urged the government to formulate a national strategy for developing the tourism industry.

Continue Reading

Trending