Business

Foreign debt restructuring: A breather for Sri Lanka to repair its low reserve buffers

Published

2 years ago

2023/08/28

By Sanath Nanayakkare

Sri Lanka is currently negotiating with foreign creditors to reduce the country’s high share of foreign currency debt liabilities because it would give Sri Lanka a breather and space to rebuild its reserve buffers, a press conference at the Central Bank revealed.

In this exercise, Sri Lanka is looking to build USD 10 billion worth of foreign reserves while keeping to a maximum forex debt service target of 4.5% of GDP in 2027-2032, Dr. Nandalal Weerasinghe, the Governor of the Central Bank of Sri Lanka (CBSL) said on August 24, 2023.

“We are negotiating to restructure our foreign debt because our forex reserves are not sufficient repay those loans as they are. The whole purpose of foreign debt restructuring is to avoid ending up in another economic crisis; otherwise there would have been no need for foreign debt restructuring,” the Governor explained.

He made these remarks during the Q&A session at the press conference held to enlighten on the newest monetary policy review of the Bank.

When our sister paper Divaina asked if the country could fall back into a crisis again by September- October 2023 when Sri Lanka begins to repay its suspended foreign loans, the Governor said that it is less likely to happen.

“Our core target post-foreign debt restructuring is to increase the foreign reserves. We are negotiating to restructure our foreign debt because our capacity and foreign exchange reserves are insufficient to make the debt repayments as they occur. Otherwise, there would have been no need for foreign debt restructuring,” he emphasized.

The Governor went on to say that a loan extension agreement with foreign creditors would help Sri Lanka to re-commence payments of the suspended foreign loans at a feasible level while accumulating foreign reserves.

“We hope to negotiate a maximum forex debt service target of 4.5% of GDP in 2027-2032 as the Finance Ministry has envisaged in its report ‘Debt service payments as a percentage of GDP’. Currently, this ratio is 9.4%. So we are asking to reduce it by a half. Thus if we can bring down foreign loan repayments of USD 6 billion down to USD 3 billion per annum, repaying that USD 3 billion won’t be unfeasible. Discussions are in progress to achieve this,” he said.

The Governor pointed out that Sri Lanka has consistently honoured repayment of loans obtained from the World Bank and the Asian Development Bank, and as foreign reserves position is getting better the country has started repaying loans taken from Bangladesh as well.

“Amid these positive developments, we are negotiating to extend the period of foreign debt in a manner the repayments are able to be sustained. That is why we are discussing a grace period, reduction of interest costs or a haircut in this regard. Once our foreign debt is restructured, new loans would flow in from the World Bank and the ADB, in addition to the assistance from the IMF. Further, Japan will start its projects and those loans will come in too. Receipts from Tourism and Exports with which we have managed so far are also there. So, in my view, re-commencing to pay foreign debt won’t have a big impact on the foreign reserves level as some have feared,” he said.

“This issue feared in some quarters is either without awareness or for some other reason would arise only if foreign reserves begin to dip after we have begun to repay foreign debt. The programme in 2027-2032 to manage our foreign currency debt liabilities at 4.5% of GDP should help us build our foreign reserves to 10 USD billion from its 3 billion. So, foreign debt restructuring will bring us two-fold relief. One is reducing the burden of foreign loan repayments and at the same time being able to accumulate our foreign reserves to make the economy stronger,” the Governor elucidated.

Restoring public debt sustainability is one of the key objectives of Sri Lanka’s IMF Program which requires policy actions and comprehensive debt treatment. There are several key pillars of Sri Lanka’s USD 3 bn IMF programme approved on 20 March 2023. They are namely: revenue-based fiscal consolidation, fiscal structural reforms, protect the poor and vulnerable, restore price stability and rebuild external buffers, safeguard financial system stability, growth-enhancing reforms, and last but not least, reducing corruption vulnerabilities.

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Business

Salesforce Startup Program targets Sri Lanka’s high-growth tech sector

Published

14 hours ago

2026/01/9

Thilina Walpola

Bhattacharya (L) and Madusanka at the launch

Salesforce, the world’s leading AI-powered CRM platform, is set to expand its presence in Sri Lanka with the launch of the Salesforce Startup Program by the end of January 2026, signalling growing confidence in the country’s technology-led growth potential.

The move comes as Sri Lanka consolidates its position as the second-largest startup ecosystem in South Asia after India, with software, data and artificial intelligence-driven ventures accounting for nearly 60 per cent of the national startup base.

Industry observers say this concentration places Sri Lanka at a decisive stage where global exposure and enterprise access could unlock the next phase of scale.

Under the programme, Sri Lankan startups will gain access to Salesforce’s global ecosystem, including AI-powered platforms, business and technical mentorship, joint go-to-market opportunities and connections to enterprise customers, enabling founders to build globally competitive solutions from Sri Lanka.

“Sri Lanka has developed a strong base of technical talent and entrepreneurial ambition that is increasingly visible regionally and globally,” said Arundhati Bhattacharya, President and CEO of Salesforce South Asia.

“Through the Salesforce Startup Program, we aim to help startups move beyond early momentum to global relevance while delivering long-term economic impact,” he added.

He also said the initiative builds on the success of its Startup Program in India and Singapore, which today supports over 435 startups, including more than 230 AI-first companies. Several participants have expanded across Asia and beyond by building products natively on the Salesforce platform.

Responding to queries, he said Sri Lanka is also emerging as an important enterprise market for Salesforce, with major corporates such as John Keells Holdings and Cinnamon Hotels adopting the platform to modernise customer engagement, sales, marketing and loyalty management operations.

In parallel, Salesforce is strengthening the country’s digital talent pipeline through its Trailhead learning ecosystem, with plans to skill nearly 1,000 learners over the next year via local workforce development partners and community-led cohorts.

Chamil Madusanka, Head of Salesforce Practice and Salesforce Architect, said the programme arrives at a critical juncture for Sri Lanka’s startup ecosystem.

“Sri Lankan founders are increasingly building AI, data and enterprise software solutions with global relevance,” Madusanka told The Island Financial Review.

“What many startups need is structured access to enterprise customers, global mentorship and market exposure. This initiative creates that bridge, enabling local companies to scale faster while remaining rooted in Sri Lanka.”

He said the Startup Program is designed to act as a connective platform, bringing together startups, enterprises, technology partners, universities and developer communities to accelerate collaboration and innovation.

By Ifham Nizam ✍️

Business

Good news on risen foreign reserves exerts buoyant impact on bourse

Published

14 hours ago

2026/01/9

Thilina Walpola

CSE activities were extremely bullish yesterday following Central Bank Governor Dr Nandalal Weerasinghe’s announcement that Sri Lanka’s foreign reserves had risen to US $ 6.8 billion in December 2025, up US$ 791 million from November 2025.

The Governor provided the estimated economic growth while announcing the Central Bank’s policy agenda for this year.

In December Sri Lanka received budget support loans from the Asian Development Bank and the International Monetary Fund.

Dr Nandalal Weerasinghe

Amid these developments both CSE indices moved upwards. The All Share Price Index went up by 226.81 points, while the S and P SL20 rose by 100.01 points. Turnover stood at Rs 12.3 billion with 12 crossings.

Top seven crossings that mainly contributed to the turnover were: Lee Hedges 18.2 million shares crossed to the tune of Rs 3.9 billion; its shares traded at Rs 416, Commercial Bank 2.1 million shares crossed for Rs 467.6 million; its shares traded at Rs 215, Ceylon Hotels 429,000 shares crossed for Rs 128.7 million; its shares traded at Rs 300, LB Finance 650,000 shares crossed for Rs 105 million; its shares sold at Rs 152.50, Ceylinco Holdings 31000 shares crossed for Rs 104.5 million; its shares traded at Rs 3400, Melstacorp 200,000 shares crossed tfor Rs 35.7 million; its shares sold at Rs 178.50 and Three Acres Farm 400,000 shares crossed to the tune of Rs 29.6 million; its shares fetched Rs 740.

In the retail market top seven companies that mainly contributed to the turnover were; Wealth Trust Securities Rs 1.17 billion (55.8 million shares traded), Commercial Bank Rs 509 million (2.4 million shares traded), HNB Rs 370 million (870,000 shares traded), ACL Cables Rs 303 million (three million shares traded), Prime Lands Residencies Rs 283 million (7.9 million shares traded), Lanka Realty Rs 227.5 million (4.7 million shares traded) and HNB Rs 218 million (332,000 shares traded). During the day 223.7 million share volumes changed hands in 55116 transactions.

Yesterday, investor interest in Wealth Trust and banking stocks led to higher activity levels, brokers said. Further, the real estate sector also performed well. Lanka Realty Investments PLC acquired 51 percent of the total number of shares in issue of Lee Hedges, CSE sources said. 13,057,595 ordinary voting shares were bought at Rs 216 each.

Yesterday the rupee opened at Rs 310.12/18 to the US dollar in the spot market, weaker from Rs 310.05/15 the previous day, dealers said, while bond yields opened marginally high.

By Hiran H Senewiratne ✍️

Business

Launch of monograph ‘Development: Not By Economics Alone’

Published

14 hours ago

2026/01/9

Thilina Walpola

The Gamani Corea Foundation (GCF) is pleased to announce the launch of the monograph Development: Not By Economics Alone by Dr. Nimal Sanderatne, Emeritus Chairperson of the Foundation. The foreword to the publication has been written by Dr. Godfrey Gunatilleke, one of Sri Lanka’s most eminent development economists. The launch ceremony will be held on Friday, 9th January 2026, at 4.00 p.m. at the Horton Lodge.

In this monograph, Dr. Sanderatne argues that development cannot be understood through economic indicators alone. He emphasizes that the quality of human capital depends not only on knowledge and skills acquired through formal education, but also on deeper, non-formal processes embedded in a society’s culture and value systems. These influence human behaviour, shaping work ethics, attitudes to work and leisure, capacity for teamwork, preferences between short- and long-term goals, and patterns of saving and consumption.

Dr. Sanderatne is a distinguished economist and academic, holding degrees from the Universities of London, Saskatchewan, and Wisconsin, and was conferred the Doctor of Science (Honoris Causa) by the University of Peradeniya in 2004.