By: Staff Writer
October 06, Colombo (LNW): The Ceylon Chamber of Commerce has welcomed Sri Lanka’s progress in securing an agreement in principle (AIP) with the International Monetary Fund (IMF) and the Official Creditor Committee (OCC) regarding the restructuring of its external debt.
This agreement includes a key deal with private bondholders and signals an important step towards achieving long-term fiscal stability for the nation.
On Friday, Sri Lanka announced that both the IMF and the OCC had approved the latest adjustments to the proposed debt restructuring plan.
The plan involves issuing two types of bonds: GDP-linked upside/downside bonds and plain vanilla bonds tied to governance indicators, though the specifics of these bonds are still under consideration.
The Ceylon Chamber of Commerce praised this development, emphasizing that the successful restructuring of the country’s external debt is vital for Sri Lanka’s economic recovery.
According to the Chamber, this marks significant progress towards fiscal stability, which aligns with the organization’s recommendations to the new government.
The Chamber noted that external debt restructuring was its top priority out of ten key areas proposed to the current administration.
The statement from the Chamber further highlighted that the completion of the OCC and IMF consultation process is a strong indicator that Sri Lanka is on track for successful reviews under the IMF’s Extended Fund Facility (EFF) arrangement.
These reviews and future disbursements will be crucial to the nation’s journey toward financial recovery and economic transformation.
The Chamber also emphasized the importance of the Comparability of Treatment (CoT) principle, which has guided Sri Lanka’s broader economic reform agenda. The government’s commitment to adhering to the CoT principle has been instrumental in gaining international cooperation and advancing the debt restructuring process.
In its statement, the Chamber expressed appreciation for the swift response from the IMF and the OCC. It acknowledged the efforts of the Sri Lankan government, the Governor of the Central Bank, the Secretary to the Treasury, and other key stakeholders who have been involved in these critical negotiations. Their collective work has helped drive this milestone in the country’s financial recovery.
Looking ahead, the Chamber is optimistic about the completion of the debt restructuring process and the positive implications it will have for Sri Lanka’s economic future. The alignment with IMF’s EFF program is seen as a significant step toward ensuring the country achieves fiscal stability, which is a core component of its ongoing economic reform and transformation efforts.
This development offers hope for the nation, as it continues to navigate its economic challenges with the support of international financial institutions and creditor bodies.
