No problem in forex debt repayments by 2028-Governor
View(s):Central Bank Governor Dr Nandalal Weerasinghe this week allayed fears in Sri Lanka, which he blamed on the media, about the foreign debt repayment schedule being affected. The schedule for repayments starts from 2028 onwards.
“There is no repayment problem as projected in the media. We cannot delay repayment of loans,” he told a group of newspaper editors on Wednesday, adding: “The reason we have financial literacy programmes for journalists is to arm them with technical knowledge to question such pronouncements which come from outside”.
In his annual interaction with senior editors, Dr. Weerasinghe said the authorities plan to renegotiate the targets set in the ongoing International Monetary Fund (IMF) programme, in the context of the cyclone and set new targets. “This review will be different as we have new challenges,” he said, alluding to an IMF team coming to Colombo on January 22.
He responded to many questions, one being the infrastructure development in the post-Cyclone Ditwah era. “The country’s infrastructure landscape will be visibly enhanced. The focus would be to ‘build better’, for example as the President said, those victims eligible for new houses will get houses better than their earlier ones, roads will be new and bridges will be new.”
But he noted the challenges of doing all this work in one year owing to the staid procurement process which often delays projects. “Yes the process is important but must be streamlined under the e-procurement process presently underway,” he said.
Dr. Weerasinghe said that when the government offered low cost loans to small businesses (MSMEs) during previous crises, there was a tendency for organisations to borrow this money and buy vehicles and other non-productive assets but then find it difficult to repay the loan.
The government is also offering a low 3 per cent-interest loan to MSMEs affected by the cyclone. “The problem is that because its cheap credit, businesses borrow for unnecessary purchases like vehicles and then default in payment. We have seen this happening in the past when small tourist businesses collapsed. People start investing in non-productive assets,” he said, adding on the other hand people complain that they have no access to these loans.
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