No country offers loans to Sri Lanka – SJB

Eran Wickramaratne

Main Opposition Samagi Jana Balawegaya (SJB) says that the international rating agencies have downgraded the country, banks and financial institutions in April as a defaulter and watch negative status. As a result the country has been plunged into a dangerous financial crisis from political and economic crises where it cannot face the international community for any financial transactions.

Addressing a press conference held at the Opposition Leader’s office in Colombo on Thursday, SJB MP Eran Wickramaratne said that no country offers loans to Sri Lanka as a result of downgrading by the rating agencies.

“Also the country cannot get a loan even from an international capital market as they would consider Sri Lanka as a country which has no capacity to repay the loans. The government is also finding it difficult to obtain loans even from Sri Lankans through local treasury bills. Despite attempts to borrow Rs. 97,500 million last week, the government was able to obtain only Rs. 46,066 million. That too as a three-month short-term loan at a high interest rate of 23 per cent,” he said.

“People have lost confidence in the government to invest in long-term Treasury bills. The entire working class of the country has taken to the streets today saying that the government responsible for facing such a situation can no longer rule this country and that the President and the government should resign immediately. This crisis affects all parties, institutions and individuals equally.”

During the month of April Fitch rating has downgraded Sri Lanka’s long Term foreign – currency Issuer Default rating (IDR) to “C” from “CC” and views that the sovereign default process has begun. S & P, while lowering Selective Default from “CC” to “C” lowered 2023 and 2028 bonds to “D” default indicating that the government cannot repay the bond.

Further Fitch rating has placed the National Long Term rating of 13 Banks and 12 non- banking financial institutions as Negative on April 26, 2022. This will create a situation where the international banks would not honour the LCs of the two State Banks where they will require an additional guarantee or an insurance premium increasing the cost, Wickramaratne said.

“Now the entire people of the country are saying the same thing. The voice of the Galle Face struggle is reflected in the country as well. The people are unanimously calling for the overthrow of this corrupt government, Gotabaya Go Home, Mahinda Rajapaksa Go Home, formation of a government without Rajapaksas and the abolition of the executive presidency.”

“The power struggle between the president and the prime minister is a family affair. It does not matter to the country. The Rajapaksas are now pushing for the formation of a Rajapaksa government without the Rajapaksas by using a second tier group of parliamentarians by leaving behind the corrupt ministers to back track to form an interim government. SJB would not take part in any interim regime under Rajapaksas,” Wickramaratne said.

“People say that this country does not want a Rajapaksa government. Moreover, the international community does not trust the Rajapaksas, so it is not possible to obtain any assistance from abroad with Rajapaksas in power.”

(Source: The Island)