Basil tells FT all options being evaluated to get out of debt trap

Finance Minister, Basil Rajapaksa has told The Financial Times (UK) in a recent interview that the country was negotiating with international bondholders for debt relief. He said that they were also ‘weighing an approach to the IMF.’

He told the FT that the government was “negotiating with everybody” and “trying all our options” to avoid a default and to seek a way out of the financial crisis the country was faced with.

“We have [international sovereign bonds] which we have to repay back, so we are negotiating with them. Then we have creditors and we have to service their debt, so whether we can have an adjustment or some type of thing,” he said.

The government would “think about a programme with the IMF” he said adding that “all those discussions are going as well.”

Sri Lanka has about $7bn in debt payments due in 2022. .

Rajapaksa said that he believed that the government could manage debt repayments but was also preparing for contingencies. “I know it’s very difficult because we have to pay this year $6.9bn and, additional to that, we have to find money for medicine, raw material, fuel, all these things,” he said.

When he was asked by FT whether the government was negotiating a restructuring with bondholders, Rajapaksa replied, “something like that. Obviously you can understand what we want and you can understand what the bondholders would like to have,” he added.