A group of senior parliamentarians in Sri Lanka have called for an “orderly negotiated postponement” of outstanding foreign debt and corrective policy measures including a “strong social welfare scheme” as per The Hindu citing a collective statement on February 11. The statement mentioned a need to “immediately initiate a multistep process towards an orderly negotiated postponement and restructure the repayment of its sovereign debts”. The Members of Parliament in the statement said, “Repaying US dollar debt in this context means that the usable foreign reserves are down to below one month of imports – the lowest on record since independence”. This comes after the sovereign’s forex reserves stood at $2.3bn in January, down 24% MoM. On Friday, Reuters also reported that Finance Minister Basil Rajapaksa was primarily focused on helping the domestic economy before thinking of any assistance from the IMF. Last week, the central bank of the nation said that there was no need for discussions on debt restructuring noting that the government would be able to pay its sovereign debt “without any interruption or default”.
Sri Lanka’s dollar bonds were traded lower through the week – its 7.55% 2030s were down 7% last week to currently trade at distressed levels of 49.1 cents on the dollar.