Sri Lanka to notify foreign creditors of debt negotiations on September 23

ECONOMYNEXT – Sri Lanka will make a virtual presentation to external creditors on September 23 to update them on the deal reached with the International Monetary Fund and recent economic developments, advisers Clifford Chance said.

Sri Lanka defaulted on its external debt in April 2022 after two years of printing money to suppress interest rates and target an output gap (stimulus) that triggered foreign exchange reserve losses, downgrades and the bondholders were no longer willing to roll over debt.

In April, Sri Lanka allowed interest rates to rise after a failed float, which ultimately reduced domestic private credit and outflows. Sri Lanka has since raised some taxes and reached a staff level agreement with the International Monetary Fund and is seeking to restructure its debt.

The Sri Lankan authorities will update creditors on the most recent macroeconomic developments, the main objectives of the reform package with the IMF and the next steps in the debt restructuring process during a virtual event.

“After the presentation, the authorities will also participate in an interactive session where participants will have the opportunity to ask their questions,” the statement said.

“The presentation along with a full Q&A document will be posted on the ministry’s website after the event.”

Creditors could register at – https://cliffordchance.eventogy.com/c/eventsrilanka/registration – and provide their names and contact details in order to receive login details.

It will be held on Friday, September 23, 2022 at 5:30 p.m. Sri Lanka time, including 8:00 a.m. in New York (EDT) / 1:00 p.m. in London (BST)

Sri Lanka must obtain assurances from creditors of their willingness to restructure debt for the International Monetary Fund in order to unlock credit from the agency and others and make debt “sustainable” according to an analytical methodology developed by the ‘agency. (Colombo/September 18, 2022)