Sri Lanka’s Central Bank has already started technical negotiations with the International Monetary Fund for an IMF program and appointing financial and legal advisors for debt restructuring will be expedited, new Central Bank Governor Nandalal Weerasinghe said.
“I want to make it very clear that I am going to exercise the powers vested with the Monetary Law Act. Central Bank should be independent without any kind of external or political influence,” Weerasinghe told reporters in Colombo.
“I have been closely monitoring the suffering of people. Delaying and denying and not telling the truth is not going to work.”
Addressing the concerns the Governor emphasized that only the foreign debt needs to be restructured on a priority basis but not the domestic loans.
“We can’t turn this overnight; this will take some time and I am trying to do my best. But there are positive developments as well. Technical negotiation with the IMF for a program already started. So, the negotiation for an IMF policy package as well as the debt restructuring will go parallelly,” he explained.
“Calling RFPs for appointing financial and legal experts for debt restructuring will be published on the Ministry of Finance website today. Within a week we will close the proposals and within another week we will appoint financial and legal advisors and intend to complete this process within two weeks.”
Expressing views on the exchange rate he said that the government should have tightened the fiscal policy, monetary policy and started debt restructuring before allowing the exchange rate to float.
Central Bank Governor Nandalal Weerasinghe added that he will remove all interest rate caps on credit cards soon.