The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), says as a responsible professional body welcomes the framework on domestic debt restructuring (DDR) that was approved by the Cabinet of Ministers on Wednesday to provide guidance for the country’s debt restructuring efforts aimed at improving debt sustainability and managing sovereign risk effectively.
Sri Lanka is today at a crucial point in history, as it takes many tough decisions to overcome the ongoing economic recession and CA Sri Lanka appreciates that the domestic debt restructuring framework was developed without significantly impacting the banking sector, while also meeting the gross financing needs targets and the minimum impact on superannuation fund holders, which will contribute to the continued stabilisation of our economy.
CA Sri Lanka is also hopeful that the exclusion of the banking sector from the domestic debt restructuring process will soon lead to lower interest rates, the benefits of which will trickle down to SMEs, the business sector, and individuals, including professionals.
Further, we are optimistic that this will result in private sector credit growth, which will ultimately help revive the economy. Considering this critical juncture, CA Sri Lanka would like to appeal to all important stakeholders, including all political parties, corporates, professional organisations, and trade unions, to support the domestic debt optimization framework to improve sovereign debt sustainability and escalate the efforts to revive the economy.
“We also wish to appreciate the role of the authorities, including the Ministry of Finance and the Governor of the Central Bank, in developing the domestic debt optimization framework. CA Sri Lanka also requests the Government of Sri Lanka, policymakers, and the business community to act responsibly to avoid future economic imbalances and to work according to the broad economic framework agreed with the International Monetary Fund for the benefit of the people of Sri Lanka.