Sri Lanka should consider asking lenders like China to waive off loans, former Prime Minister Ranil Wickremesinghe said during an exclusive interview with Indian global news network - WION news.
Responding to a query that if Sri Lanka would do the same as Pakistan by asking loan waivers from lenders including China, Wickremesinghe said:
"We can ask China, but whether it is China or any other country, they will all have to take a policy decision. If you give one, you have to give the others."
However he noted that Sri Lanka’s problem is that the bulk of its foreign loans, about 50% of debt is international sovereign bonds. Sri Lanka has to repay a billion dollars in a few months time.
We take it off our reserves and our reserves will come down. I can’t see any new money coming in. Earlier we balanced it out and we are on the path to repayment, he said.
He claimed that he thinks the government is now talking with the IMF and they have restored the revenue to the levels that the IMF wanted, but it is going to be difficult.
The country will somehow have to pay this money he said adding that foreign reserves will deplete further and there is no way of meeting that gap.
So, we are all going to be in trouble, if not by this year then by next year. The creditor countries must look favourably on the debtor countries, " he said.
Sri Lanka’s external debt repayments are 4.8 billion US dollars for 2020 and payments for the first half of the year is already financed, Deputy Central Bank Governor Nandalal Weersinghe said.
The new administration has to come up with a short and medium term debt raising plan, but financing for the first part of the year can be made comfortably, he said.
“Certainly government will have to raise a certain amount of commercial financing,” Weerasinghe said.
About 1.5 billion US dollars comes in every year from project financing from multilateral lenders, he said.
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