AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Daily mirror breaking news today9/8/2023 ![]() To do this, the Treasury bonds held by superannuation funds will be exchanged against longer-term maturity bonds. The authorities are proposing a 30 per cent haircut on ISBs and other dollar-denominated debt, which is still under negotiation with foreign creditors.Įven the impact on pension funds is limited as the authorities assured no reduction to current member balances and a nine per cent return, which is more or less what the country’s largest pension fund, Employees’ Provident Fund (EPF) has been delivering on average in recent years. The Central Bank Governor Dr.Nandalal Weerasinghe yesterday told reporters in Colombo that the country’s financial sector, mainly represented by banks and non-bank financial institutions, will be excluded from the DDR process as they are already subject to an effective tax rate of over 50 per cent.Īs the Governor pointed out, the hit on the banks that is coming from the restructuring of International Sovereign Bonds (ISBs) is curtailed to a certain extent, with the banks having already provided for about 35 per cent of such liabilities. While sparking a debate whether the domestic debt restructuring (DDR) plan that was approved this week is sufficient for Sri Lanka to attain long-term debt sustainability, the plan is being widely praised for not delivering a jolt and taking an equitable and sensible approach towards tackling the country’s debt crisis.įor some sceptics, this is too good to be true, while for others this is a very well-thought-out plan formulated by the country’s Finance Ministry and the Central Bank after much number crunching.Īt the outset, DDR or domestic debt optimization (DDO) as the authorities prefer to call it, has no impact on the country’s financial sector-contrary to the earlier belief of many-,and its effect on superannuation or pension funds such as the Employees’ Provident Fund (EPF) appears to be limited. *Country needs to reduce its debt by about US $ 17Bn between 2022-2027 to achieve debt sustainability *Authorities are proposing a 30 per cent haircut on ISBs and other dollar-denominated debt ![]()
0 Comments
Read More
Leave a Reply. |