Govt. repaid $8bn in debt is 'just number manipulation'

The Sri Lanka Human Rights Centre, in a special media statement, says circulating reports at presemt claiming that Sri Lanka has paid US$8.094 billion in debt and interest this year are merely misleading “numerical manipulation” and do not reflect any real reduction in the country’s massive debt burden.

The organisation states that the real situation shows both external and domestic debt have continued to increase significantly. In the first three months of 2026 alone, foreign debt reportedly rose by US$788 million, while domestic debt increased by Rs. 490 billion.

According to official data from the State Debt Management Department, although it is factually correct that the government has paid US$5.98 billion in principal and US$2.11 billion in interest (a total of US$8.094 billion), these payments were made in Sri Lankan rupees.

The organisation further notes that an equivalent amount of rupee debt has been re-borrowed through treasury bills and securities, meaning the overall debt burden has not decreased.

On external debt repayments, the statement says that under restructuring agreements, Sri Lanka has paid only about US$530 million in total during the first quarter of 2026, including payments to multilateral, bilateral, and private creditors.

Total external debt repayments required for 2026 stand at US$2.7 billion, with US$1.4 billion still remaining for the next six months.

It also highlights that recent inflows from the IMF (US$695 million), ADB (US$450 million), World Bank (US$200 million), and project loans (US$100 million) will largely be used to meet debt obligations, leaving little or no surplus.

Regarding domestic debt, the organisation claims that Rs. 1,930 billion (US$6.04 billion equivalent) in new domestic borrowing has been raised in the first quarter of 2026 through treasury bills and bonds, along with nearly US$1.5 billion in additional external borrowing.

It further argues that IMF reporting conventions convert rupee debt into dollar terms for comparison purposes, but this does not mean rupee debt is actually repaid in dollars.

When assessed properly—rupee debt in rupees and dollar debt in dollars—the figures show domestic debt rising from Rs. 18,883 billion to Rs. 19,383 billion, and external debt increasing from US$36.68 billion to US$37.468 billion.

The organisation concludes that claims of an $8 billion debt repayment are false, and urges the public not to be misled by what it calls politically motivated narratives, noting that both domestic and foreign debt continue to rise rapidly.