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

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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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USA–Sri Lanka Chamber of Commerce plans New York campaign to promote Tourism and Business

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The initiative will provide Sri Lankan businesses with a vital platform to introduce their products and services to the American market

Timing aligns with national policy discussions

By Sanath Nanayakkare

The USA–Sri Lanka Chamber of Commerce is exploring an innovative promotional initiative to showcase Sri Lanka’s tourism, cultural heritage, and commercial opportunities in the heart of New York City during the upcoming Christmas and holiday season.

The proposed campaign aims to bring Sri Lanka’s unique identity to one of the world’s most internationally recognized cities through a mobile digital billboard featuring high-quality photographs and videos highlighting the island’s natural beauty, rich heritage, and diverse commercial offerings. Designed to capitalize on New York City’s significant holiday-season foot traffic, the initiative will reach American consumers, international tourists, and potential business partners.

The digital showcase will feature pristine beaches, scenic mountains, waterfalls, tea plantations, wildlife, ancient cities, Buddhist heritage, traditional arts, authentic cuisine, and modern attractions, positioning the country as a premier international travel destination. An interactive QR code linking to comprehensive tourism information will also be incorporated, allowing viewers to directly explore travel opportunities.

Beyond destination promotion, the initiative provides Sri Lankan businesses with a vital platform to introduce their products and services to the American market. Enterprises representing Ceylon tea, spices, food products, gems and jewellery, apparel, handicrafts, wellness, hospitality, and tourism will have the opportunity to showcase their brands alongside the broader national campaign.

The Chamber notes that this effort will be particularly beneficial for small and medium-sized enterprises (SMEs) seeking greater international exposure, brand recognition, and commercial partnerships in the United States. By integrating tourism promotion with commercial visibility, the project aims to strengthen Sri Lanka’s international image while supporting trade, investment, and business development.

Operating under the central message of “Discover Sri Lanka. Experience Sri Lanka. Visit Sri Lanka,” the campaign presents the island as a destination defined by natural beauty, cultural richness, distinctive products, and entrepreneurial potential. More information on the initiative is accessible at www.usaslcc.org.

Tourism sector stakeholders have welcomed the move, noting that private-sector-led initiatives of this nature bypass cumbersome bureaucratic procurement procedures and complex tender processes typically associated with state-run promotional campaigns abroad.

The timing aligns with recent national policy discussions regarding tourism promotion. Participating in a Fireside Chat at the inauguration of the Sri Lanka Economic and Investment Summit 2026, organized by the Ceylon Chamber of Commerce, President Anura Kumara Dissanayake emphasized that a proper procurement mechanism needs to be established before acquiring tourism promotional concepts, recommending a performance-based system where agencies are compensated according to verified growth in tourist arrivals.

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Seylan Bank partners Colombo Motor Show 2026 as official banking and leasing partner

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For 10th consecutive year

Seylan Bank PLC, the Bank with a Heart, has reaffirmed its commitment to supporting Sri Lanka’s automotive industry by partnering with the 20th edition of the Colombo Motor Show 2026 as the Official Banking & Leasing Partner for the 10th consecutive year. This makes Seylan Bank the longest-standing partner of the Colombo Motor Show, further reflecting its longstanding association with one of Sri Lanka’s most prominent automotive exhibitions. The four-day exhibition is scheduled to take place from 20th to 23rd November 2026 at the Bandaranaike Memorial International Conference Hall (BMICH), marking the first time the Colombo Motor Show will be held as a four-day event.

As one of Sri Lanka’s leading international motor and motor accessories exhibitions, the Colombo Motor Show will bring together vehicle enthusiasts, prospective buyers, industry professionals and automotive service providers. The 2026 edition is expected to feature over 200 trade stalls covering motor vehicles, accessories, spare parts, lubricants, tyres, batteries, leasing facilities and other motor-related services.

Through its continued partnership, Seylan Bank will showcase a comprehensive range of financial solutions designed to support customers in meeting their personal and business needs, with a particular focus on Seylan Leasing facilities. Visitors to the exhibition will have the opportunity to receive on-the-spot leasing evaluations and expert guidance from Seylan Leasing Specialists, helping them explore vehicle financing options conveniently during the event.

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WCIC sharpens focus on scaling women-owned businesses

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WCIC Office Bearers

The Women’s Chamber of Industry and Commerce (WCIC) is sharpening its focus on helping women entrepreneurs move beyond business creation towards sustainable growth, as it expands its membership, partnerships and advocacy footprint.

WCIC Chairperson Gayani de Alwis, concluding her second tenure, highlighted the Chamber’s efforts had increasingly centered on creating pathways for women to translate entrepreneurial ambition into viable enterprises and, importantly, build those businesses for the longer term.

“Ultimately, our impact is not measured by the number of programmes we conducted, but by the women whose businesses grew, whose voices became stronger, whose horizons expanded and whose contribution to the economy became greater,” she said addressing the WCIC 41st Annual General Meeting (AGM) held on 22 September for which the Chief Guest was Canadian High Commissioner to Sri Lanka and the Maldives Isabelle Martin.

The focus has included a special initiative for female university students with an entrepreneurial mindset, regional chapter initiatives in the Northern Province, capacity-building programmes and the inaugural ‘Beyond Ramp Up’ workshop.

The Chairperson said these initiatives were designed to move women “from aspiration to enterprise, and from enterprise to sustainable growth”, signaling a broader focus on strengthening the progression of women entrepreneurs beyond the initial stages of business formation.

WCIC recorded a 20 percent increase in membership during the period with membership crossing 460 and expanded its ecosystem through a series of strategic partnerships.

Internally, WCIC moved to strengthen its governance framework, revising its Articles of Association to ensure regulatory compliance and introducing a Code of Conduct and Board self-assessment. Clearer organisational roles, job descriptions and performance targets were also introduced as part of efforts to strengthen accountability and professionalise its operations.

Reflecting on her tenure, the Chairperson said the period had been about building a stronger, more connected and professionally governed organisation, while converting its wider ambitions into tangible opportunities for women in business.

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