Sri Lanka has decided to go into "Pre-emptive negotiated default": CBSL Governor

COLOMBO (News 1st); 

Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe says Sri Lanka will suspend Normal Debt Servicing and start negotiating debt restructuring.

Speaking at a media briefing which was held at the Finance Ministry premises this morning, Dr. Nandalal Weerasinghe said the CBSL has decided to resort to a Pre-emptive Negotiated Default of the Foreign Debt.

Whilst pointing out that when the Government serviced the previous International Sovereign Bonds (ISBs), there were many requests NOT to settle the debt but use it for other matters, the CBSL Governor said this measure would be a positive step towards the future.

Dr. Nandalal Weerasinghe further said "We have come to a situation where the ability to service our debt is very low. That's why we decided to go for a Pre-emptive Default."

The Central Bank Governor further pointed out that the scarce foreign currency reserve should NOT be used to service debt, adding that it should instead be used to purchase other essential items.