Bhathiya Barukanda
The Finance Ministry of Sri Lanka has issued a statement addressing recent misconceptions regarding the country’s debt restructuring process and its engagement with the International Monetary Fund (IMF).
The statement, titled “Clarifications on Debt Restructuring and the Debt Sustainability Analysis,” emphasizes that any country has the right to challenge the IMF’s Debt Sustainability Assessment if it disagrees with the findings.
However, it said that a standoff in such a scenario would only delay an agreement on a financing program for several months, if not years.
The Ministry refuted claims that Sri Lanka failed to produce its own Debt Sustainability Analysis during debt restructuring negotiations, attributing such commentary to a lack of understanding of standard debt restructuring mechanisms.
The press statement highlighted that the IMF cannot proceed with a financing program if a country’s debt is deemed unsustainable.
The Finance Ministry noted that while both Sri Lanka and its creditors rely on their respective DSA models for negotiations, the IMF’s DSA serves a distinct role in determining the terms of sovereign debt restructuring with specific creditors or groups of creditors.
Read Full Statement: https://www.treasury.gov.lk/api/file/a5ac69ab-b046-49e6-aaa1-9e45bca68567
