CBSL chief’s special statement on domestic debt optimization strategy

The Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe states that an extended bank holiday was declared from June 29 to July 03, 2023, including June 30, in order to obtain necessary time required for the domestic debt optimization strategy of Sri Lanka.

Making a special statement regarding the matter this evening (25), the CBSL chief also assured that no deposit in any bank in the country will be affected in the process of restructuring domestic debt and that interests will not be affected.

“The main reason for announcement of bank holiday on (June) 30th was to create a sufficient number of days for domestic debt optimization strategy that has been discussed with the Central Bank and the Ministry of Finance”, he said.

Furthermore, Dr. Weerasinghe emphasized that the strategy has to be announced, implemented and obtain the proper approval process from the Cabinet of Ministers, committees in the parliament and also the parliament debates, adding that the process requires at least around 04 days.

“Continuously, during the dates the debt market and the economy market should not function because their information is very market sensitive… If those proposals are discussed in the public, those sensitive markets are not functioning”, he added.

In addition, the CBSL Chief also mentioned that even though June 30th is a bank holiday, all the banking activities that can be done during the period, with banks physically opening or not, can be carried out as usual.

“For an example the internet banking, ATM withdrawals and fund transfers on accounts that can be done with banks physically opening or not [can be carried out]”, he said.

Meanwhile, Dr. Weerasinghe ensured that there will be no reduction of bank deposits that people are having in commercial banks and non-banking institutions, and also no reduction will take place in interest rates that they are currently receiving in terms of their contracts with the banks.

“If the banks have agreed to provide some interest rates, they will continue to be received by the deposit holders. They will not be affected adversely anyway with the domestic debt optimization strategy”, he asserted.

On June 23, the government declared a special bank holiday on June 30, 2023.

This was announced in a special gazette notification issued by Prime Minister Dinesh Gunawardena in his capacity as the Minister of Public Administration, Home Affairs, Provincial Councils & Local Government.

The special bank holiday was declared under Section 10(1) of the Holidays Act, No. 29 of 1971.