Lanka finance minister urged responsible and diligent discussions on the matter, as premature speculations could potentially undermine market confidence….reports Asian Lite News
Sri Lanka’s State Minister of Finance Shehan Semasinghe cautioned against premature speculation regarding domestic debt optimisation, emphasising that a strategy for optimisation has not yet been finalised.
Speaking to media in Colombo, Semasinghe stressed the government’s commitment to ensuring the stability of the banking and financial sector, Xinhua news agency reported.
He urged responsible and diligent discussions on the matter, as premature speculations could potentially undermine market confidence.
Semasinghe highlighted the progress made in engaging with bilateral creditors for debt restructuring efforts.
The state minister expressed optimism that these engagements would lead to favourable agreements that contribute to overall stability.
Central Bank Governor Nandalal Weerasinghe also reassured the public about the safeguarding of public bank deposits and the stability of the banking system in any reorganisation of domestic debt.
Addressing a public forum, Weerasinghe emphasised that financial sector stability was a key objective of the central bank, and measures would be taken to ensure the protection of public deposits and the overall stability of the banking system.
China debt
China’s Vice Minister of Foreign Affairs, Sun Weidong, recently visited Sri Lanka and held a meeting with Sri Lankan President, Ranil Wickremesinghe, Sri Lanka-based Mawrata News reported. However, there was no mention of debt restructuring in the official announcements issued after the meeting between the two leaders.
The official statement released after the meeting only mentioned that China will give maximum support to Sri Lanka to recover from the economic crisis. China’s Vice Minister of Foreign Affairs invited him to China for a conference on China’s belt and road initiative, as per the news report. Ranil Wickremesinghe might be trying to go to China to discuss debt restructuring. This time, Wickremesinghe will request for the restructuring of the Chinese debt. However, China’s stance of 2014 is unlikely to witness a change in 2023, Upul Joseph Fernando wrote in the Mawrata News report. China is playing a game of ‘Hide and Seek’ on Sri Lanka’s debt restructuring, the report said further.
Sri Lankan President last travelled to China on May 14, 2019. Sri Lanka’s then-President Maithripala Sirisena visited China to attend a conference and met with the Chinese President. Later, Gotabaya Rajapaksa took over as Sri Lankan President and he was also invited to China. However, Rajapaksa initially refused to visit China due to COVID-19 and later avoided China by travelling to other nations.
Chinese vice minister, who recently travelled to Sri Lanka, invited Ranil to attend a conference in China. Ranil Wickremesinghe had attended a conference in Japan before that and Beijing must have believed that participating in a conference in China would be easy for him, Mawrata News reported. However, the official statement released after the meeting did not mention debt restructuring.
In 2014, Sri Lanka’s Former finance ministry secretary PB held talks on debt restructuring with China even before Sri Lanka went bankrupt, Mawrata News reported. Although the Mahinda Rajapaksa-led government in Sri Lanka at that time was a close friend of China. However, Beijing did not agree to the debt restructuring request.
Instead, China intended to sign agreements to further develop the Hambantota port and cover the loss, according to the news report. In 2017, Sri Lanka’s then-Prime Minister Ranil Wickremesinghe visited China and asked for loan relief. However, China declined the request. (IANS/ANI)