ECONOMYNEXT – Sri Lanka’s talks with sovereign bondholders will end in September 19, President Ranil Wickremesinghe said at a campaign rally, signaling that he expected talks to conclude successfully.
He took over a country that was bankrupt and his task was to end it. He discussed with the IMF and reached an agreement. Then discussions were held with bilateral creditors, with two agreements were reached. One with China and another with other countries.
“By tomorrow the discussions with private bondholders will end,” he told an election rally Wednesday.
“There we will enter into an agreement. When all three agreements are considered, the label of bankruptcy will be removed.”
The first task then would be completed.
When combined with earlier agreements, the label of bankruptcy will be removed, he said.
“Though we have made the economy stable, it can reverse. We have to re-inforce it.”
Sri Lanka is currently rated as being in selective default by rating agencies. Once a deal is reached and new bonds issued, they will be upgraded to a higher level.
Before the current round of talks, Sri Lanka reached a framework agreement with bondholders to restructure defaulted bonds with upside/downside securities linked the future gross domestic product growth in July.
The IMF and the official creditors have assessed it, but the verdict was not published. (Colombo/Aug17/2024 – revised with exact televised quotes of President. An earlier story contained paraphrased comments released by his campaign office.)