World-renowned scientist to help SL solve environmental problems – The Island

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By Shamindra Ferdinando

Former outspoken minister DEW Gunasekera said the unprecedented crisis facing cash-strapped Sri Lanka on its external debt obligations in 2022 and 2023 could not be resolved by seeking intervention from the IMF.

The government has ignored repeated calls from various parties, both inside and outside parliament, to request the intervention of the IMF, as it is aware that the IMF is unable to intervene because almost half of the obligations of the country’s external debt was to the international money market. , said the former secretary general of the Communist Party The island yesterday.

Referring to New York-based rating agency Fitch, downgrading Sri Lanka’s sovereign rating to “CC” last Friday (17) as the country struggled to meet two major repayment obligations of two international sovereign bonds from $ 500 million due in January 2022 and $ 1 billion expected in July 2022, the former lawmaker said the government and the opposition should stop playing politics with this issue.

The former MP said there were other refunds scheduled during this period from both foreign and local.

Fitch’s statement reflected the daunting challenges facing Sri Lanka, the former CP chief said, urging the government to announce how it intends to meet its debt obligations.

The latest downgrade was announced following the departure of Finance Minister Basil Rajapaksa. Foreign Minister Professor GL Peiris, who is also the chairman of the ruling SLPP, will handle the finance portfolio.

Gunasekera said the role of the IMF would be limited and that more than 50 percent of total debt includes international sovereign bonds and Chinese and Japanese loans.

“The government also faces debt service payments in foreign currency, including principal and interest, of $ 6.9 billion in 2022, equivalent to nearly 430% of official gross international reserves in November 2021. The cumulative foreign currency debt service, including interest and principal, is approximately $ 26 billion from 2022 to 2026, “the rating agency said.

When asked if the IMF could help reschedule international sovereign bonds, former central bank governor WD Lakshman told The Island it was possible. The September government replaced Lakshman, who had been governor since December 2019, with Ajith Nivard Cabraal. Stressing the importance of addressing the issue in question, Lakshman stressed that Sri Lanka has never failed before.

SJB spokesman MP Harsha de Silva reiterated that the IMF may also reschedule international sovereign bonds. The former minister of state said that was his position throughout this period.

Gunasekera also maintained his assertion that the IMF could not intervene in this regard.

Former governor of Uva, southern and central provinces Rajith Keerthi Tennakoon said yesterday the snowball problem could not be solved by countries keen to help Sri Lanka and lending agencies international, as Sri Lanka has obtained the majority of loans from the capital market. Tennakoon said Sri Lanka faces a huge challenge to resolve this issue amid persistent political turmoil. The civil society activist stressed that those seeking to resolve the crisis by printing trucks laden with cash owe the country an explanation. The debt service crisis and growing difficulty in meeting the oil bill would eventually overwhelm the country, Tennakoon said.


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