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Monday July 26th, 2021
Economy

Sri Lanka repays 41-pct of US$6.3bn in forex debt due in 2021

ECONOMYNEXT – Sri Lanka has repaid 2.6 billion US dollars out of 6.3 dollars of debt denominated in foreign currency some of which were owed to domestic lenders, Central Bank’s Director of Economic Research Chandranath Amarasekera said.

“The government has foreign currency debt externally as well as locally,” Amarasekara told reporters in the second week of June.

“If you take the total of these two you are looking at 6.3 billion dollars in 2021. Out of that we have already met 2.6 billion dollars in payments and 3.6 billion US dollars remaining.”

“Most of the domestic foreign currency debt can be rolled over.”

Domestic dollar debt includes Sri Lanka Development Bonds sold to banks and other investors and also borrowings from off-shore banking units of commercial banks.

Officials have said about 350 million dollars out of a billion US dollar bond due in July was also owed to local banks.

Out of the 6.3 billion dollars in forex debt, 3.7 billion US dollars were owed to foreign investors.

Up to June 2021, 1.3 billion US dollars were paid and 2.4 billion US dollars remained.

“Essentially our concern, if at all, is the external debt service payments…” Amarasekara said.

“We are confident that we will be able to maintain the impeccable debt service payments record Sri Lanka has maintained in the past, going forward as well.”

Some of the domestically owed foreign debt however has been re-financed by banks from foreign loans.

Sri Lanka has been facing forex shortages since a Latin America style money printing central bank was set up in 1950 by a US money doctor.

Most of the central bank set up in Latin America by so-called Triffin missions of the Fed and Argentina central bank creator Raul Prebisch has ended in import substitution, sovereign default and also central bank bankruptcy and automatic dollarization. (Colombo/June16/2021 – Corrected – Headline corrected to show 41-pct debt repaid.)

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