Sri Lanka's Public Debt Sustainability and Restructuring Update
6 420
Jan-20
Foreign exchange reserves in USDm, yearly FX debt service in % of reserves as at end of previous
year¹
10
70%
8
Sri Lanka Central Government's foreign
currency yearly debt service in % of
Gross Official Reserves as at end-2019,
end-2020 and end-2021
May-20
Consequently, foreign reserves were depleted to preserve citizens' access to basic needs and to
service foreign debt obligations
As the energy crisis reinforced the need for foreign currency to finance fundamental imports, the scarcity of available funding sources
triggered the depletion of foreign reserves and the collapse of the Sri Lankan Rupee, hence fueling rising inflation
Foreign exchange reserves and debt service payments
CCPI Inflation
In y-o-y change and in annual average
Sep-20
98%
139%
0%
20%
Jan-20
40%
60%
May-20
PBOC swap
CCPI based Headline Inflation (Y-o-Y)
CCPI based Headline Inflation (Annual Avg.)
The decline in foreign reserves hampered Sri Lanka's ability to mitigate the effects of the crisis through the
subsidization of imports, whilst its currency was steadily losing value on the back of ever-increasing inflation-
leading to adverse conditions for all Sri Lankan people, in particular the poor and vulnerable
Source: Central Bank of Sri Lanka
Note: (1) The debt service showcased is the Central Government foreign currency debt service for the entire year as percentage of Gross Official Reserves
as at end-2019, end-2020 and end-2021 respectively. 2022 Central Government foreign currency debt service is calculated at end-2021
Sep-20
Jan-21
May-21
6
+58p.p. in
the last year
28%
64%View entire presentation