Sri Lanka feels the benefits of debt moratorium

Though there are doubts about how soon the US$ 2 billion aid pledge can be drawn down, the government is already getting the benefits of the debt moratorium. Though there are doubts about how soon the US$ 2 billion aid pledge can be drawn down, the government is already getting the benefits of the debt moratorium. The Finance Ministry says the money saved from the moratorium would be vital to restore macro-stability in the economy.

This year Sri Lanka will not have to pay back about Rs. 25 billion originally set aside to repay foreign governments in the Paris Club.

The government has already saved Rs. 4.5 billion after suspending payments to some creditors in February.

Of the Paris Club countries, only the United States has to confirm the moratorium as the US government needs congressional approval to give debt relief to borrowers.

The savings will stabilize the balance of payments and strengthen the external sector of the economy.

“We have to have debt moratorium because we don’t need to raise foreign currency to service the external debt. The US$ 250 million will provide a protection to the balance of Payments therefore the exchange rates w