ECONOMYNEXT – Sri Lanka is holding a second meeting with bilateral creditors on November 03, State Minister for Finance Shehan Semasinghe said as the country attempts to get assurances debt re-structuring from creditors to close a deal with the International Monetary Fund.
“Today we are going to have a second round of talks with creditors,” Minister Semasinghe told a meeting of Inland Revenue officers in Colombo.
“The first round was in Washington. We scheduled another meeting to ensure that all matters will be clarified.”
In Washington Sri Lanka had also talked with private creditors.
“We had a lengthy meeting. They have asured support,” he said.
Sri Lanka first has to get assurances of debt re-structuring from official creditors before reaching a deal with private creditors.
Sri Lanka has large debt rollover volumes (Gross Financing Need) running up to 37 percent of GDP in 2022, which the International Monetary Fund wants to bring down.
The exact GFN target is not known, but other countries under restructure have levels around 15 percent, and some less.
According to a Q and A released after an on session involving all creditors, the Finance Ministry has said the IMF debt sustainability analysis parameter also included domestic debt.
A suitable level of GFN may depend on the depth of domestic credit markets and access to other credits according to analysts. (Colombo/Nov02/2022)