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High interest rate regime to remain until IMF deal clinched

Bingumal Thewarathanthri expects the current high interest rate regime to remain until the country secures the approval for US$ 2.9 billion bailout package from IMF executive board which is likely in March.

“Everyone is waiting when the rates are going to come down. The rates will come down only with IMF executive board level approval. When there’s a clarity on the haircuts that’s going to be borne by foreign bondholders, bilateral creditors and domestic creditors, then hopefully bond prices and interest rates will come down. But, don’t expect an easing cycle very soon,” he said.

Thewarathanthri speculated that the country is likely to receive IMF executive board approval for the US$ 2.9 billion bailout package at the IMF Executive board meeting scheduled in March.

“Specially, due to the domestic political transformation happening in China, reaching out to China and getting their consent before Christmas is very unlikely. There’s a process in China and this process might take up to January. The IMF executive board is meeting in March. So, if we get everything sorted out by January-february, then we can get IMF Board approval in March,” he added.

MIRROR BUSINESS

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2022-11-28T08:00:00.0000000Z

2022-11-28T08:00:00.0000000Z

https://dailymirrorepaper.pressreader.com/article/281900187223165

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