Leading asset manager highlights why SL should avoid debt restructuring

A leading asset manager in the country yesterday urged the authorities to avoid a debt restricting exercise, which is being advocated by several economists as the only solution to the country’s debt problem exacerbated by a foreign exchange crisis.

Ceylon Asset Management Managing Director Dulindra Fernando says if Sri Lanka opts for a debt restructuring exercise, it will “tarnish Sri Lanka’s impeccable credit record since independence and damage its brand in foreign capital markets”.

“Despite doomsday forecasts by some economists advocating a debt restructure, Sri Lanka has several options and combinations of strategies to consider in order to bridge the gap,” he said.

He also says a competitively valued currency will help win the confidence of foreign funding agencies and if Sri Lanka decides to seek the assistance of the International Monetary Fund, the government should reach an agreement with the multilateral lender that does not involve a debt restructure to regain the confidence of foreign investors.

Please read the full op-ed on Page 9.