Sri Lanka will settle USD 1bn ISB maturing in July; no debt restructuring needed, says CBSL

The Government and the CBSL have already taken necessary measures to secure alternative forex inflows via a number of bilateral and multilateral funding arrangements to meet the upcoming debt obligations, including the US dollars 1 billion ISB maturing in July 2022, the Central Bank said.

Releasing a statement, the bank said that with the realisation of expected forex inflows and the resulting build-up of international reserves, the need for initiating discussions with investors on debt restructuring does not arise, as the Government would be able to ensure the settlement of its sovereign debt without any interruption or default.

“Sri Lanka successfully settled the US dollars 500 million International Sovereign Bond (ISB) that matured in January 2022 despite the adverse speculation in certain quarters that such settlement would not be possible,” the statement said.

“In fact, with the repayment of ISBs totalling USD 2.5 billion from January 2020 onwards, the total outstanding ISBs have now reduced to USD 12.55 billion and will reduce to USD 11.55 billion by July 2022, broadly in line with the Government’s strategy to reduce ISB debt gradually to around 10% of GDP.”

The Central Bank assures that the Government and the CBSL are committed to honour all forthcoming debt obligations and thereby maintaining Sri Lanka’s unblemished record of debt servicing.

Related: Sri Lanka official reserves down to USD 2.36bn in January; Gold reserves down further

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