Sri Lanka’s Sovereign Debt Restructuring: A Critical Look at Creditor Interests and the Application of Net Present Value 11th October 2026
Presented by Dhanusha Gihan Pathirana, a PhD student interested in economics at the University of Sri Jayewardenepura, this thought-provoking discussion explored what might be described as “the other side of the coin” in evaluating Sri Lanka’s sovereign debt restructuring.
He explained how conventional Net Present Value (NPV) analysis may have underestimated the true burden of debt by failing to adequately account for currency depreciation and its impact on the country’s future repayment capacity.
He also raised concerns about potentially predatory lending practices and argued that ambitious International Monetary Fund (IMF) targets may have strengthened creditors’ bargaining positions, limiting the extent of debt reductions (haircuts) and potentially leaving Sri Lanka vulnerable to continued economic difficulties.
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