CB Chief says SL not bankrupt; insists it is pre-emptive default

CB Governor Dr. Nandalal Weerasinghe 

• Finance Minister-led delegation leaves to Washington DC for talks with IMF, WB and others

Central Bank Governor Dr. P. Nandalal Weerasinghe last week faulted the 13 April Daily FT headline ‘SL declares bankruptcy’ (ft.lk/top-story/Sri-Lanka-declares-bank-ruptcy/26-733409), saying the country is not bankrupt but opted for a pre-emptive negotiated default.

“The country is not bankrupt but the Government took a conscious decision to opt for a pre-emptive negotiated default in the largest interest of the country and its people,” Dr. Weerasinghe emphasised.  

Finance Minister Ali Sabry also denied Sri Lanka was bankrupt and it was only a case of the country being unable to service debt at the moment. Claiming that Sri Lanka’s assets were worth around $ 400 billion and external debt was only $ 47 billion, Sabry insisted that the country was facing only a Balance of Payments crisis.

Other Government officials also said defaults are distinct from bankruptcy and that Sri Lanka is not bankrupt but insolvent.

To start formal in-person talks with the International Monetary Fund (IMF), Minister Sabry and a delegation of high level officials yesterday left for Washington DC. The delegation will attend the IMF-World Bank Spring Meetings as well and hold discussions with officials of multilateral organisations as well.