The Central Bank said they have finalised the two sets of financial and legal advisors to negotiate with multiple creditors of Sri Lanka and the selected parties would be submitted to the cabinet or final approval
It is expected announce at the cabinet news briefing scheduled to be held today under the patronage of new cabinet sposkesman Minister Bandula Gunawardena
From the remarks of the Central Bank Governor Dr. Nandalal Weerasinghe, the selected groups would be sent to the earliest Cabinet meeting as the absence of a full Cabinet of Ministers after the violent incidents that took place on May 9 which led to the resignation of the then Prime Minister Mahinda Rajapaksa delayed the final leg of the process of appointing the two specialities.
On April 9, soon after taking office as the new Governor by Dr. Weerasinghe, the Central Bank issued Request For Proposals (RFPs) from financial and legal advisors who had the professional competency and the experience in dealing with sovereign lenders to restructure the country’s debt in the case of a sovereign default as the government decided to suspend foreign debt payments on April 12.
Although the authorities wanted to appoint the experts in the two fields expeditiously in two weeks, the process took longer than expected as there was lukewarm response for the RFPs in the first week, which then had to be extended by one more week.
And then the country went into further abyss and anarchy with the violence that erupted on May 9 where people took law into their hands prompting Dr. Weerasinghe to call for political stability without which he said he wouldn’t continue in his post.
However, with the appointment of former Prime Minister and the leader of the United National Party, Ranil Wickremesinghe forthwith brought a semblance of stability which was further cemented with the appointment of a Cabinet, although a Finance Minister post still remains vacant.
Sri Lanka’s central bank will appoint legal and financial advisors for debt restructuring within the next few days as it is also in the process of expediting talks with International Monetary Fund (IMF
The bank has completed theselection process in two weeks following all procurement guidelines, but still getting the approval is pending to expedite, Dr Weerasinghe said.
Weerasinghe’s predecessor Ajith Nivard Cabraal declined to seek IMF assistance saying that it was bad for the country because it could result in sharp rupee depreciation, raising interest rates to above 30 percent, curbing pensions and size of public service, and asking the government to sell state assets.
However, the central bank’s rupee floating has already allowed around 60 percent depreciation in the currency while it has also increased the policy rates.
Weerasinghe also said the technical negotiations with the IMF is nearing completion and it needs a Finance Minister for signing off.