News
Economics don cautions govt. against rushing to restructure domestic debt
Sri Lanka must restructure domestic debt only after a careful study of what concessions are given by foreign debtors, Wasantha Athukorala, Professor in Economics – University of Peradeniya says.He stressed that Sri Lanka must restructure domestic debt only if there was no other course of action. “Domestic debt restructuring can have a serious impact on the liquidity of banking and other financial institutions,” he warned.
Prof. Athukorala said that the Sri Lankan economy was shrinking and domestic debt restructuring would make matters far worse.
Last week, the Central Bank announced that Sri Lankan authorities were exploring the possibility of domestic debt optimisation (DDO) operations aimed at liquidity relief while preserving financial stability to avoid further eroding of the country’s repayment capacity.
The Central bank said the DDO would be conducted on a voluntary basis and be based on its consultations with major T-Bond holders.
“”Despite the ambitious fiscal consolidation efforts, Sri Lanka’s public debt trajectory is set to remain unsustainable in the absence of a comprehensive debt treatment. Sri Lanka is also facing a significant external financing gap over the IMF program period. This financing gap will have to be covered through new external funding and external debt service relief. The Authorities are also exploring options for a domestic debt optimization (DDO) operation aimed at liquidity relief while preserving financial stability to avoid further erosion of Sri Lanka’s repayment capacity. It is envisaged that this DDO will be conducted on a voluntary basis and be based on our consultations with major T-Bond holders.
As we move ahead, we are looking forward to accelerating and intensifying engagement with all our creditors in a transparent way, in good faith, and we are hoping to reach debt treatment agreements that are consistent with the IMF debt sustainability analysis and with the comparability of treatment principle,” the Central Bank said.
As part of the official visit to London for the 43rd Commonwealth of Learning (COL) Board of Governors Meeting 2026, the Prime Minister of Sri Lanka, Dr. Harini Amarasuriya, held discussions with academic experts from the British Council on Wednesday [20 May 2026].
The discussions focused on strengthening cooperation in education, particularly in the areas of teacher training, English language programmes, education frameworks, and language acquisition skills.
The British Council shared international experience and highlighted its ongoing engagement in Sri Lanka, while expressing readiness to support the country through technical assistance, teacher development initiatives, and policy collaboration.
Discussions also included views on improving quality assurance, expanding research collaboration, and enhancing learning opportunities.
The Prime Minister appreciated the British Council’s continued engagement in Sri Lanka and reiterated the importance of deepening partnerships.
[Prime Minister’s Media Division’
Prime Minister Dr. Harini Amarasuriya, who is currently on an official visit to the United Kingdom, met with members of the Sri Lankan community living in London on Wednesday [20th] and engaged in cordial discussions.
Despite the event being held on a weekday, it was notable that nearly one thousand Sri Lankans representing the Sinhala, Tamil, and Muslim communities attended with great enthusiasm.
Addressing the gathering, Prime Minister Dr. Harini Amarasuriya stated that despite natural disasters and international crises, the present government has succeeded in stabilizing the country’s economy while providing relief to the people. She further noted that Sri Lanka’s political culture has now undergone a positive transformation that is irreversible.
Minister of Women and Child Affairs Saroja Paulraj, addressing the event, stated that a governance system has now been established in the country where all communities are treated equally and the benefits of economic development are shared fairly among all citizens.
Moving away from the traditional method of political gatherings, the event also provided an open platform for members of the Sri Lankan community to directly raise questions and express their views to the Prime Minister and the Minister.
Commenting on the organization of the event, the organizing committee stated that all expenses, including dinner, were borne by the participants themselves. The organizers further remarked that it is unsurprising that opposition groups, accustomed to organizing such events through the misuse of public funds, appear unsettled by this transparent process.
The occasion was attended by the Minister of Women and Child Affairs Saroja Paulraj and Sri Lanka’s High Commissioner to the United Kingdom, Nimal Senadheera.
[Prime Minister’s Media Division]
Prime Minister Dr Harini Amarasuriya currently undertaking an official visit to London, United Kingdom, to participate in the 43rd Commonwealth of Learning (COL) Board of Governors Meeting 2026 held a bilateral meeting with the Yvette Cooper MP, Foreign Secretary of the United Kingdom ON Wednesday [20]. The Prime Minister was accompanied by Sri Lanka’s High Commissioner to the United Kingdom, Nimal Senadheera, along with officials from the Sri Lankan High Commission.
During the meeting, the Prime Minister conveyed Sri Lanka’s appreciation to the United Kingdom for the support extended in the aftermath of Cyclone Ditwa, including ongoing rebuilding and recovery assistance. The Prime Minister also commended the United Kingdom’s support in facilitating increased bilateral trade and exports for Sri Lanka.
The Prime Minister briefed the UK delegation on Sri Lanka’s recent economic developments and policy priorities, the Government’s commitment to advancing human rights and reconciliation, as well as Sri Lanka’s positive growth trajectory.
The two sides also exchanged views on current global geopolitical developments, challenges in the energy sector, and the importance of enhancing regional connectivity and long-term energy security.
Both sides also emphasised the importance of strengthening structured academic mobility frameworks while ensuring fairness, clarity, and integrity within migration systems.
They also reaffirmed their commitment to further strengthening bilateral cooperation between the two countries in areas of mutual interest.
[Prime Minister’s Media Division]
PM meets academic experts from the British Council
Gaby Lewis to lead Ireland at T20 World Cup
PM meets Sri Lankan community living in London
Kapila Wijegunawardena to head SLC’s new selection committee
Afghanistan refugee women’s team set for England tour under ECB initiative
DR Congo cancels World Cup training camp over Ebola outbreak
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
#SundayIsland 17th December – Headlines
Sunday Island – 28th March
Sunday Island Headlines – 21 March
Sunday Island – 21st February – Headlines
-
Features5 days agoSri Lankan Airlines Airbus Scandal and the Death of Kapila Chandrasena and my Brother Rajeewa
-
News6 days agoLanka’s eligibility to draw next IMF tranche of USD 700 mn hinges on ‘restoration of cost-recovery pricing for electricity and fuel’
-
News5 days agoKapila Chandrasena case: GN phone records under court scrutiny
-
News5 days agoRupee slide rekindles 2022 crisis fears as inflation risks mount
-
Features2 days agoOctopus, Leech, and Snake: How Sri Lanka’s banks feast while the nation starves
-
Business5 days agoExpansion of PayPal services in Sri Lanka officially announced
-
News21 hours agoSteps underway to safeguard Sri Lanka’s maritime heritage
-
Features7 days agoMysterious Death of United Nations Secretary General Hammarskjöld