A man lights a smoke at the Galle Face Beach in Colombo on Mar 20, 2023. (PHOTO / AFP)
COLOMBO — Sri Lankan authorities are exploring options for domestic debt optimization aimed at liquidity relief while preserving financial stability in order to avoid further eroding of the country's repayment capacity, according to Central Bank of Sri Lanka.
The central bank said in a press release on Thursday night that the debt optimization will be conducted on a voluntary basis and be based on its consultations with major Treasury Bonds holders.
The central bank said the Sri Lankan government has successfully taken all actions needed to secure the IMF financing
The press release followed an investor presentation that the central bank officials made to explain the current economic situation in the country, and outline the key pillars and objectives of an International Monetary Fund (IMF) program as well as the next steps concerning the engagement with creditors.
READ MORE: Sri Lanka closes in on $2.9b IMF deal after China support
On March 20, the IMF executive board approved a bailout package for Sri Lanka, serving to unlock up to 7 billion US dollars in funding from international financial institutions, the central bank said.
"The IMF program provides a clear roadmap in terms of policy implementation and will stabilize the economy of Sri Lanka and allow the country to regain its growth potential and address its economic vulnerabilities," the press release said.
The central bank said the Sri Lankan government has successfully taken all actions needed to secure the IMF financing.
READ MORE: Sri Lanka receives first tranche of IMF bailout
Sri Lanka started related negotiations with the international lender in 2022 after the South Asian country was hit by a severe economic crisis.
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