Business leaders and representatives from various chambers and unions gathered at the Presidential Secretariat for a meeting with President Ranil Wickremesinghe. The discussions focused on the Domestic Debt Optimization (DDO) program and its potential impact on the banking system. The business community expressed gratitude towards the government for taking steps to protect the banking sector and alleviate financial burdens on individuals and industries.
President Wickremesinghe urged business leaders to educate their employees about the significance of the financial restructuring and its potential benefits. By disseminating information widely, stakeholders can better understand the restructuring process and its implications for their livelihoods. The President emphasized that reduced interest rates, expected within a few months, would provide hope for those burdened by financial obligations.
As part of the restructuring efforts, the President highlighted the imminent injection of development assistance into the economy. This support is expected to revitalize the construction sector, stimulate economic growth, and create employment opportunities.
During the meeting with trade union representatives, President Wickremesinghe emphasized the importance of implementing the Domestic Debt Optimization program to prevent potential increases in interest rates for small businesses. He also expressed concerns about the possible resurgence of the dollar due to the strengthening of the rupee. The President emphasized the need to simultaneously conduct foreign debt optimization to mitigate this risk.
Dr. Nandalal Weerasinghe, the Governor of the Central Bank, assured business leaders that the banking system and deposit-taking institutions would be excluded from the debt restructuring process. He cited the significant contributions banks have already made to the Treasury through taxation and debt moratoriums, which have impacted their operations. Instead, the restructuring would primarily focus on exchanging treasury bonds held by superannuation funds, including the Employees’ Provident Fund (EPF) and Exchange-Traded Funds (ETF).
Superannuation funds participating in the bond exchange will receive a fair solution that guarantees a 9% annual return and protects their current balances. The restructuring will provide the government with liquidity relief, easing fiscal consolidation and positioning the economy for stability and growth.
Representatives from the Ceylon Chamber of Commerce (CCC) and the Joint Apparel Association Forum commended the government’s efforts to protect the banking system and relieve the financial burdens faced by businesses. They expressed hope that this initiative would lead to cheaper funds becoming available to the private sector, facilitating investment and economic growth.
The discussions held at the Presidential Secretariat demonstrated the appreciation of business leaders for the government’s commitment to safeguarding the banking system and supporting the economy. The Domestic Debt Optimization program, combined with the injection of development assistance, is expected to reduce interest rates, provide debt relief, stimulate growth, and create employment opportunities. Business leaders expressed their willingness to support the government’s efforts and emphasized the importance of addressing challenges in the energy sector to ensure the continuity and competitiveness of the private sector.