• Ex-Deputy Governor says restructuring plan requires two to three months to be finalised 

• Says only evidence of finalising plan necessary for staff-level agreement

• Notes plan should be available by the time IMF Executive Board approves fund disbursement

By Imesh Ranasinghe   Sri Lanka needs to show evidence that it would be finalising a debt plan with its creditors to reach a staff-level agreement with the International Monetary Agreement (IMF), given that the Debt Sustainability Analysis (DSA) has been completed, former Central Bank of Sri Lanka (CBSL) Deputy Governor Dr. W.A. Wijewardena said. Speaking to The Morning Business, he said it would take another two to three months for Sri Lanka to complete a debt plan, but the country needs to at least show some evidence that it would be finalising such with creditors, as this will prove sufficient for the country to arrive at a staff-level agreement with the IMF. “What is necessary is some evidence that we are moving ahead with the plan with the approval of all the creditors,” he added. Moreover, Dr. Wijewardena said that the debt plan should be made available by the time Sri Lanka obtains the IMF Executive Board’s approval for the final agreement and disbursement of funds. Sources revealed to The Sunday Morning Business last week that Sri Lanka’s attempt to reach staff-level agreement with the IMF is being delayed due to discrepancies in the calculations of the CBSL and the IMF with regard to certain parameters in the DSA. In a statement last week, the IMF said that they plan to visit Colombo between 24-31 August to continue discussions with the Sri Lankan authorities on economic and financial reforms and policies. Meanwhile, during an interview with Bloomberg on Tuesday (22), CBSL Governor Dr. Nandalal Weerasinghe said that the country can only formally approach its external creditors once the staff-level agreement with the IMF is reached. “We have not officially approached the creditors yet. We need a staff-level agreement first, and only after that will we be reaching out to them formally. However, in the meantime, we have been sharing all our data and information with our creditors for them to facilitate the process.” Dr. Weerasinghe said that once the staff-level agreement has been reached, Sri Lanka has to approach its external creditors and start discussions “in good faith, for relief”. “For that, we need assurance from our external creditors and we think that that would take about three or four months. If all goes well and everybody co-operates with our debt management strategy, then we hope to obtain financial assurance in December, so that the IMF can submit our paper to the External Fund and start disbursing the Extended Fund Facility (EFF) towards the end of this year. That is the timeline we would like to implement. That depends on the external creditors and the negotiation process. Hopefully, all relevant parties will support us,” he said. When The Morning Business contacted the Treasury for a comment, they directed us to the CBSL which refused to comment.