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SL will engage major T-bond holders for voluntary optimization: Governor

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ECONOMYNEXT –Sri Lanka will not re-structure Treasury bills outside of central bank holdings and will engage with major T-bond holders for voluntary ‘optimization’ Governor Nandalal Weerasinghe said.

“There will be some treatment on central bank held Treasury bills,” Governor Nandal Weeasinghe told a creditor presentation Thursday.

“Other Treasury bill holdings will not be treated. Treasury bonds we envisage voluntary optimization.”

Sri Lanka has to at least extend the maturities of bonds to reach a gross financing need target averaging 13 percent of GDP in 2027-2032 based on projections in an IMF debt sustainability analysis. Of that foreign debt service has be below 4.5 percent of GDP on average.

“Local currency creditors participation in a debt optimization will help reaching the DSA targets,” Treasury Secretary Mahinda Siriwardena said.

“Authorities are exploring options for domestic debt operations aimed at liquidity relief while preserving financial stability to avoid further eroding Sri Lanka’s repayment capacity.”

The government and advisors will “invite consultations with major T-bond holders to gauge options and constraints”, he said.Governor Weerasinghe and Treasury Secretary Mahinda Siriwardene said Sri Lanka is likely to outperform the growth targets in the IMF debt sustainability analysis given past history. The IMF DSA is projecting 3.1 percent growth in the next few years.

Sri Lanka grew at rates around 4 to 5 percent during a 30 year war, but growth started to fall after serial currency crises hit the country under flexible inflation targeting with output gap targeting (monetary stimulus) during peacetime. In 2020 taxes were also cut for stimulus, going beyond open market operations and outright purchases of bonds seen earlier.

Meanwhile state spending went up from 17 to 20 percent of GDP under state expansionist revenue based fiscal consolation after spending based consolidation (cost cutting) was thrown out of the window from 2015 to 2019, critics say.

Sri Lanka is now trying to cut spending and excessive growth of the public sector, based on normal economic principles, to limit the burden of the unaffordable state on productive sectors and the poor, while preserving essential spending.According to the latest IMF program, fiscal consolidation will be “primarily” revenue based.

Sri Lanka’s Treasury bill and bond yields were higher than required due to uncertainty over whether they will be re-structured and the so-called ‘gilt’ status will no longer apply.

The lack of an early cut off date for domestic debt is a key problem in the IMF’s current debt resolution framework as domestic bond buyers are the last resort lenders after most foreign creditors stop lending, when the IMF says a country’s debt is no longer sustainable.

Download presentation from here.

Sri Lanka and debt advisors will engage with major Treasury bond holders, Weerasinghe said.

Key T-bond holders are Employment Provident Fund, Employment Trust Fund, insurance companies and banks.

Sri Lanka is also conducting an asset quality of review of banks.

Based on its results a debt optimization options will be offered paying attention to asset liability mis-matches, Weerasinghe said.

By preserving banking sector stability foreign investors are more likely to get repaid.



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Landslide Early Warnings issued to the Districts of Badulla, Kalutara, Kandy, Kegalle, Kurunegala, Matale and Monaragala

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The National Building Research Organisation (NBRO) has issued landslide  early warnings to the districts of Badulla, Kalutara, Kandy, Kegalle, Kurunegala, Matale and Monaragala effective untill 2100hrs on 12th May 2026.

Accordingly,

Level II landslide early warnings have been issued to the divisional secretaries division and surrounding areas of  Passara in the Badulla district.

Level I landslide early warnings  have been issued to the divisional secretaries divisions and surrounding areas of Bandarawela in the Badulla district, Walallawita in the Kalutara district, Pasbage Korale,  Akurana,  Gangawata Korale,  Panvila,  Yatinuwara,  Ganga Ihala Korale,  Doluwa and  Udapalatha in the Kandy district, Mawanella,  Bulathkohupitiya,  Yatiyanthota,  Aranayaka,  Kegalle and  Rambukkana in the Kegalle district, Rideegama in the Kurunegala district, Rattota, Naula and Ambanganga Korale in the Matale district and Badalkumbura and Wellawaya in the Monaragala district.

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Showers about 100 mm are likely at some places in the Western, Sabaragamuwa, Central, Uva, Southern, North-western, Northern and North-central provinces and in Trincomalee district.

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WEATHER FORECAST FOR 11 MAY 2026
Issued at 05.30 a.m. on 11 May 2026 by the Department of Meteorology

 

The low-level atmospheric disturbance in the vicinity of Sri Lanka is likely to develop into a low-pressure area around the next 36 hours. Therefore, the prevailing showery conditions over the island are expected to continue during the next few days.

Showers or thundershowers will occur at times in most parts of the island and Cloudy skies are expected, under the influence of the aforementioned system. Heavy showers about 100 mm are likely at some places in the Western, Sabaragamuwa, Central, Uva, Southern, North-western, Northern and North-central provinces and in Trincomalee district.

The general public is kindly requested to take adequate precautions to minimize damage caused by temporary localized strong winds and lightning during thundershowers.

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Treasury theft: Speaker’s conduct brought to IPU’s attention: SJB  

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Dayasiri

SJB MP Dayasiri Jayasekera has sought the intervention of the Inter-Parliamentary Union (IPU) to pressure the JVP-NPP government to respect the rights of the Opposition.

MP Jayasekera told The Island that they wouldn’t allow the NPP to suppress the truth regarding the theft of Treasury funds amounting to USD 2.5 million. He accused Speaker Dr. Jagath Wickremaratne of depriving the Opposition of its legitimate rights, at the behest of the government.

Jayasekera said that the Speaker’s conduct regarding the action taken against Deputy Secretary General of Parliament Chaminda Kularatne, too, had been brought to the notice of IPU and other international associations.

The text of MP Jayasekera’s letter to the Secretary general of IPU: “I respectfully submit this petition seeking the attention and intervention of the Inter-Parliamentary Union concerning a matter affecting parliamentary accountability, the rights of elected representatives, and the proper functioning of constitutional oversight within the Parliament of Sri Lanka.

On 06 May 2026, I Dayasiri Jayasekara MP submitted a formal request to the Hon. Speaker of Parliament seeking permission, under the Parliament (Powers and Privileges) Act No. 21 of 1953 and Standing Order 29(1), to raise a question of privilege regarding alleged constitutional and parliamentary violations by Mr. Harshana Suriyapperuma, Secretary to the Treasury of Sri Lanka.

The proposed privilege motion raised matters including:

1. Alleged violations of Articles 148, 149, and 150 of the Constitution of Sri Lanka concerning parliamentary control over public finance;

2. Alleged failure to report to Parliament concerning a controversial and unlawful transfer of approximately USD 2.5 million from the Treasury;

3. Alleged non-compliance with parliamentary committee procedures under the Standing Orders of Parliament;

4. Questions relating to constitutional eligibility under Article 91(1)(d)(xiii) of the Constitution concerning dual citizenship and qualification to sit and vote in Parliament;

5. A request that the matter be referred to the Parliamentary Ethics and Privileges Committee established under Standing Order 118.

 Despite the seriousness of the constitutional and parliamentary issues raised, the Hon. Speaker declined permission for the privilege issue to be raised in Parliament.

It is respectfully submitted that this refusal has the effect of:

•  Preventing an elected Member of Parliament from exercising his parliamentary oversight function;

• Restricting parliamentary scrutiny over matters involving public finance and constitutional accountability;

•  Undermining the privileges of Members of Parliament to raise matters of urgent public importance;

•  Limiting institutional transparency concerning allegations involving senior state officials.

The right of parliamentarians to raise questions of privilege and matters relating to constitutional governance is an essential component of parliamentary democracy and legislative independence. The refusal to permit even the presentation or preliminary consideration of such a matter raises serious concerns regarding parliamentary accountability mechanisms in Sri Lanka.

Accordingly, I respectfully request that the Inter-Parliamentary Union:

1.Take cognizance of this matter as one affecting the rights and functions of Members of Parliament;

2.Seek clarification from the relevant parliamentary authorities in Sri Lanka regarding the grounds upon which the privilege motion was disallowed;

3.Consider whether the refusal is compatible with internationally recognised principles of parliamentary democracy, accountability, and freedom of parliamentary speech;

4. Encourage the Parliament of Sri Lanka to ensure fair and transparent procedures governing parliamentary privilege motions and constitutional oversight.

I further request that this communication be placed before the appropriate committee or mechanism within the IPU dealing with the rights and duties of parliamentarians.”

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