Former Governor of the Central Bank of Sri Lanka (CBSL), Dr. Indrajith Coomaraswamy, addressed allegations regarding the surge in International Sovereign Bond (ISB) borrowings during his tenure that led to the country’s debt default, clarifying that much of the debt was used for liability management and to avert an earlier default.
Speaking at a public lecture on “A New Paradigm in Macroeconomic Management,” Dr. Coomaraswamy responded to claims that his administration’s borrowing policies contributed to Sri Lanka’s eventual default. He acknowledged that ISB borrowings increased from USD 5 billion in early 2015 to USD 15 billion by the end of 2019 but argued that nearly half of this was due to switching financial instruments for better cost management and stability.
Commenting further, he clarified: “Thank you very much for asking me that question, giving me a chance to explain. One is I think the ISBs went up from 5 billion in the beginning of 2015 to 15 billion by end of 2019. So there’s a 10 billion increase in the ISBs outstanding.”