Sri Lanka approves debt restructuring plan in Parliament

Sri Lanka's Parliament voted to support a proposal to restructure a staggering domestic debt in a special session Saturday as the Indian ocean island nation struggles to emerge from an unprecedented economic crisis.

The proposal was approved with 122 lawmakers voting for it and 62 against it, in the 225-member house.

The parliament's approval enables the government to go ahead with the proposed restructuring plan which is part of the prerequisites of a bailout package approved by the International Monterey Fund - which has described Sri Lanka's debt as unsustainable - to help alleviate the country's humanitarian crisis.Sri Lanka's total debt has exceeded $83 billion, of which $41.5 billion is foreign and $42.1 billion is domestic.


Under the proposed domestic debt restructuring program, the bulk of the debt will be shared by the Central Bank and superannuation funds from which the government already borrowed money, while national banks will be spared because of possible negative ramifications on deposits, according to top government officials.

Central Bank governor, Nandalal Weerasinghe, previously said the treasury bills owned by the bank would be converted into treasury bonds with a longer maturity period and the same has been proposed for superannuation funds.