Sri Lankan economy collapsed – Ranil

Our economy has faced a complete collapse. Sri Lanka intends to enter into an official level agreement with the IMF by the end of July, Sri Lankan Prime Minister Ranil Wickremesinghe informed Parliament yesterday (22).

“It is  not possible for Sri Lanka to seek assistance from any donor without an assurance from IMF on assistance,” the Ranil said in a special statement in the House.

We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has faced a complete collapse. That is the most serious issue before us today.

Currently, the Ceylon Petroleum Corporation is USD 700 million in debt. As a result, no country or organisation in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash. 

We have taken loans amounting to USD 4 billion under the Indian credit line. We have requested more loan assistance from our Indian counterparts. But even India will not be able to continuously support us in this manner. Even their assistance has its limits. On the other hand, we too must have a plan to repay these loans. These are not charitable donations. 

The only safe option before us now is to hold discussions with the International Monetary Fund. In fact, this is our only option. We must take this path. Our aim is to hold discussions with the IMF and arrive at an agreement to obtain an additional credit facility.

Representatives of the financial and legal advisory firms Lazard and Clifford Chance are now in Sri Lanka to assist us in our debt restructuring efforts. The framework for debt repayment restructuring is being formulated. 

Meanwhile, next Monday, a team of representatives from the U.S. Department of the Treasury will also arrive in Sri Lanka.

We intend to enter into an official level agreement with the IMF by the end of July. 

Considering this planned framework and the official level agreement it is expected that the Executive Board of the IMF will then arrive at its final decision. 

Parallel to this, we will organise a credit aid conference which will be led by India, Japan and China, our main lending countries. However, there have been some conflicts and disagreements between us in the recent past. We are working towards resolving these and fostering friendly relations once again.

If we receive the IMF seal of approval, the world will once again trust us. It will help us to secure loan assistance as well as low-interest loans from other countries in the world. 

We are also currently holding discussions with the World Bank, Asian Development Bank, the United States, other friendly nations and heads of state to secure interim short-term loans till we receive IMF support, he further added.



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