Sri Lankan President Defends Debt Deal Amid Opposition Uproar

Sri Lankan President Ranil Wickremesinghe defended the country's debt restructuring deal against opposition criticism, promising transparency and parliamentary scrutiny. He detailed the concessions made, including extended repayment periods and lower interest rates. The President also credited India and Bangladesh for their short-term assistance during the crisis.

Sri Lankan President Ranil Wickremesinghe on Tuesday refuted the Opposition's criticism of the debt-strapped nation's external debt restructuring agreement with major bilateral creditors. He pledged to provide all agreements and documents for parliamentary study.

Despite a planned debate being postponed due to transparency concerns raised by opposition members, Wickremesinghe dismissed the criticism as unfounded. 'No bilateral creditor would agree to a principal reduction; rather, concessions are granted through extended repayment periods, grace periods, and lower interest rates,' he clarified.

Wickremesinghe, who is also the finance minister, explained that the debt restructuring terms involve extending principal repayments until 2028, maintaining interest rates below 2.1 percent, and extending the debt resettlement grace period until 2043. The President emphasized that the restructuring aims to make the debt sustainable and free up funds for public services.

The country's external debt now totals USD 37 billion, encompassing USD 10.6 billion in bilateral credit, USD 11.7 billion in multilateral credit, and USD 14.7 billion in commercial debt, of which USD 12.5 billion is in sovereign bonds. Wickremesinghe assured that all agreements on debt restructuring would be reviewed by Parliament once negotiations with sovereign bondholders conclude.

He acknowledged the short-term credit assistance provided by India and Bangladesh, helping during the country's financial nadir. 'At that stage, we were aided by two friendly nations, India and Bangladesh, with short-term credit assistance. No other country was allowed to offer long-term loans,' he said, adding that all agreements would be scrutinized by Parliament.

Opposition leader Sajith Premadasa countered, asserting that the government had failed to secure the optimal deal in the debt restructuring process.