The IMF team will look into the progress made by the government in the implementation of the IMF sponsored economic reforms programme including the whole issue of external debt restructuring to reach a mutually acceptable agreement while remaining compatible with the debt sustainability targets.

The domestic debt optimisation operation involving T-Bills held by the Central Bank (CB) and Treasury Bonds (in the context of a voluntary exchange operation) will also be discussed during official meetings with visiting IMF team in Colombo on May 12 -23.

Only T-Bills held by the CB (equivalent to 62.4 percent of total outstanding T-Bills) will be considered for debt treatment, senior ministry official disclosed.

All other T-Bills are excluded from the envisaged operation. All T-Bonds may be considered for participation in a voluntary domestic debt optimisation.

Measures designed to minimise impact on banks and preserve financial stability and the impact on the domestic financial sector will be carefully assessed by the authorities.

Domestic debt optimaisation operation discussions with creditors are yet to begin while the first meeting of Sri Lanka’s official bilateral creditors committee was concluded last week.