Sri Lanka's Debt Dynamics

CHRONICLE™

CHRONICLE™

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Look at the math re. Sri Lanka's Debt Dynamic:

Sri Lanka is a USD 85 billion economy. The economy will generate Forex Inflows of around USD 32 billion in 2021, and possibly about USD 2 -3 billion more than that amount, each year, every year, thereafter.

As of now (February 2021), the total ISBs outstanding is USD 14 billion, which is only 16.7% of Sri Lanka's total debt. None of the other Creditors who hold 83.3% of Sri Lanka's Debt seem to show any sign of concern or stress about it's repayment ability.

Sri Lanka has to re-pay only around USD 1.0 to 1.5 billion each year until 2029 in it's ISB amortizations for the next 8 years.

In that background, will the authorities be so foolish as to default on a payment of around USD 1.0 to 1.5 billion per annum and risk it's entire economy and impeccable credit history?

In 2014 (GDP - USD 79 billion), the amount of ISBs outstanding was USD 5.0 billion, the interest cost was USD 285 million and the average interest rate was 5.4%. The Rupee was at 131 to the USD.
By 2019 (GDP - USD 83 billion), the Yahapalanaya Osthars had borrowed until the total ISBs outstanding had reached USD 15 billion, and the interest servicing had risen up to USD 1.1 billion at an average interest rate of 7.4%, and the Rupee at 183 per USD.
That's the challenge that we are sorting out.
The same chaps who caused this are now hoping that we will fail, and trying very hard to take the country towards an economic crisis.
But this time too, like in 2007 to 2009, they will be disappointed!

Last edited by CHRONICLE™ on Sun Feb 21, 2021 9:34 pm; edited 1 time in total

Sun Feb 21, 2021 9:31 pm by ChooBoy · Sun Feb 21, 2021 9:31 pm by ChooBoy

I think your information is correct. However, political opponents have only highlighted the amount of debt and never reported the type of debt.
Other than the ISB, there is absolutely no possibility of a national default.

Mon Feb 22, 2021 10:10 am by Mr. Wayne · Mon Feb 22, 2021 10:10 am by Mr. Wayne

CHRONICLE wrote:

Look at the math re. Sri Lanka's Debt Dynamic:

Sri Lanka is a USD 85 billion economy. The economy will generate Forex Inflows of around USD 32 billion in 2021, and possibly about USD 2 -3 billion more than that amount, each year, every year, thereafter.

As of now (February 2021), the total ISBs outstanding is USD 14 billion, which is only 16.7% of Sri Lanka's total debt. None of the other Creditors who hold 83.3% of Sri Lanka's Debt seem to show any sign of concern or stress about it's repayment ability.

Sri Lanka has to re-pay only around USD 1.0 to 1.5 billion each year until 2029 in it's ISB amortizations for the next 8 years.

In that background, will the authorities be so foolish as to default on a payment of around USD 1.0 to 1.5 billion per annum and risk it's entire economy and impeccable credit history?

In 2014 (GDP - USD 79 billion), the amount of ISBs outstanding was USD 5.0 billion, the interest cost was USD 285 million and the average interest rate was 5.4%. The Rupee was at 131 to the USD.
By 2019 (GDP - USD 83 billion), the Yahapalanaya Osthars had borrowed until the total ISBs outstanding had reached USD 15 billion, and the interest servicing had risen up to USD 1.1 billion at an average interest rate of 7.4%, and the Rupee at 183 per USD.
That's the challenge that we are sorting out.
The same chaps who caused this are now hoping that we will fail, and trying very hard to take the country towards an economic crisis.
But this time too, like in 2007 to 2009, they will be disappointed!

Sounds more like a political post.

Mon Feb 22, 2021 11:48 am by **ONTHEMONEY** · Mon Feb 22, 2021 11:48 am by **ONTHEMONEY**

Hi all,

http://www.ft.lk/front-page/Nivard-says-doomsayers-will-be-disappointed-again/44-713622

Superb RESPONSE by Hon. minister Mr ANC to all of the rating agencies. After listening to Dr Kenneth Dr Zilwa of CBSL, The following is how I perceive the GOVERNMENT is expecting to manage the cash flows

How the Govt. is expecting to manage the debt payments:

Inflows 2021:
Export target: USD 13 bn
Remittances (net): USD 7 bn
Tourism receipts (net): USD 1.5 bn
Port City construction inflow (net): USD 1 bn
China currency swap: USD 1 bn
Total inflows during the year: USD 23.5 bn

Outflows 2021:
Imports: USD 19 bn
Debt payments: USD 4.5 bn
Total outflows: USD 23.5 bn

Thus, reserves position at the end of 2021 will be at USD 4.7 bn. But due to mismatch of inflow and outflow timing, reserves may go up or down from the year end estimate during the year.

Therefore, I am pretty much CONFIDENT about the present GOVERNMENT having a majority in parliament together a with successful track record in TURNING THINGS AROUND

Good Luck

Mon Feb 22, 2021 12:18 pm by **ADVENTUS** · Mon Feb 22, 2021 12:18 pm by **ADVENTUS**

ONTHEMONEY wrote:Hi all,

http://www.ft.lk/front-page/Nivard-says-doomsayers-will-be-disappointed-again/44-713622

Superb RESPONSE by Hon. minister Mr ANC to all of the rating agencies. After listening to Dr Kenneth Dr Zilwa of CBSL, The following is how I perceive the GOVERNMENT is expecting to manage the cash flows

How the Govt. is expecting to manage the debt payments:

Inflows 2021:
Export target: USD 13 bn
Remittances (net): USD 7 bn
Tourism receipts (net): USD 1.5 bn
Port City construction inflow (net): USD 1 bn
China currency swap: USD 1 bn
Total inflows during the year: USD 23.5 bn

Outflows 2021:
Imports: USD 19 bn
Debt payments: USD 4.5 bn
Total outflows: USD 23.5 bn

Thus, reserves position at the end of 2021 will be at USD 4.7 bn. But due to mismatch of inflow and outflow timing, reserves may go up or down from the year end estimate during the year.

Therefore, I am pretty much CONFIDENT about the present GOVERNMENT having a majority in parliament together a with successful track record in TURNING THINGS AROUND

Good Luck

Can't trust him. He had been lying through out. Sad

I'd like to know what could happen if the country defaults, in case things don't as planned?

What should we keep an eye on to determine this before it happens?

What's likely to happen to the stock market?

Thanks

Mon Feb 22, 2021 1:28 pm by **God Father** · Mon Feb 22, 2021 1:28 pm by **God Father**

- Says SL will generate forex inflows of around $ 32 b in 2021
Total ISBs outstanding is $ 14 b or only 16.7% of Sri Lanka’s total debt
- Says none of the other creditors who hold 83.3% of Sri Lanka’s debt seem to show any sign of concern or stress about its repayment ability
- Sri Lanka has to repay only around $ 1 to 1.5 b each year until 2029 in its ISB amortisations for the next 8 years
- Insists authorities won’t be foolish as to default of smaller payment and risk impeccable credit history
Money, Capital Markets and Public Enterprises Reform State Minister Nivard Cabraal declared yesterday that doomsayers of Sri Lanka will be disappointed when the country honours its foreign debt repayment track record.

He noted that Sri Lanka is an $ 85 billion economy and that it will generate forex Inflows of around $ 32 billion in 2021, and possibly about $ 2 -3 billion more than that amount each year, every year, thereafter.

He said as of now (February 2021), the total International Sovereign Bonds (ISBs) outstanding is $ 14 billion, which is only 16.7% of Sri Lanka’s total debt.

“None of the other creditors who hold 83.3% of Sri Lanka’s debt seem to show any sign of concern or stress about its repayment ability. Sri Lanka has to re-pay only around $ 1 to $ 1.5 billion each year until 2029 in its ISB amortisations for the next eight years,” Cabraal said.

In that background, the State Minister questioned “will the authorities be so foolish as to default on a payment of around $ 1 to $ 1.5 billion per annum and risk its entire economy and impeccable credit history?”

He recalled that in 2014 (when GDP was $ 79 billion), the amount of ISBs outstanding was $ 5 billion, the interest cost was $ 285 million, and the average interest rate was 5.4%. The rupee was at 131 to the dollar.

“By 2019 (GDP was $ 83 billion), the Yahapalanaya osthars had borrowed until the total ISBs outstanding had reached $ 15 billion, and the interest servicing had risen up to $ 1.1 billion at an average interest rate of 7.4%, and the rupee at 183 per dollar,” Cabraal recalled.

“That’s the challenge that we are sorting out. The same chaps who caused this are now hoping that we will fail, and trying very hard to take the country towards an economic crisis. But this time, too, like in 2007 to 2009, they will be disappointed,” he added.

http://www.ft.lk/front-page/Nivard-says-doomsayers-will-be-disappointed-again/44-713622

ADVENTUS and Mr. Wayne dislike this post

Mon Feb 22, 2021 1:35 pm by Mr. Wayne · Mon Feb 22, 2021 1:35 pm by Mr. Wayne

Too many Viyathmaga lackeys.

ADVENTUS likes this post

Sun Feb 28, 2021 7:50 pm by **sanjeewa88** · Sun Feb 28, 2021 7:50 pm by **sanjeewa88**

Mr ANC is not talking about the loan repayments to the multilateral credit agencies and other creditors. Also, the private sector needs to pay its loans in foreign currencies. Then the total will be USD 6 billion.

Since the major exporters are keeping their reserves in USD, LKR is gradually depreciating. So the government asked to convert a minimum 25% of the USD income to LKR. The poor economic management prevents the conversion of USD to LKR.

Therefore the ANC's prediction is unlikely to achieve during the year.