Sri Lanka has unveiled a comprehensive restructuring plan for its domestic debt to meet the targets set by the International Monetary Fund. The plan involves exchanging the existing treasury bills for long-term bonds with three options for holders of locally issued dollar-denominated bonds.<br />''<br />''The first option mirrors the treatment given to international sovereign bond investors, with a 30 percent principal reduction, 6-year maturity, and 4 percent interest rate. The second option provides treatment similar to bilateral dollar creditors, featuring no principal reduction, a longer 15-year maturity, a 9-year grace period, and a low 1.5 percent interest rate. <br />''<br />''The third option allows bondholders to exchange their holdings for local currency-denominated instruments with no principal reduction, a 10-year maturity, and an interest rate based on the Sri Lanka Standing Lending Facility Rate (SLFR) plus 1 percent. The restructuring plan also includes the conversion of superannuation funds' local currency bonds into longer-maturity bonds. <br />''<br />''<span style="color: #222222;">Sri Lanka aims to finalize the debt restructuring talks by September, aligning with the first review of its IMF program. The successful implementation of the plan is crucial to reduce debt-to-GDP, meet financing needs, and maintain fiscal targets. The domestic debt restructuring framework will be presented to parliament for approval over the weekend's special parliamentary session, with the bond exchange of superannuation funds expected to be finalised by the end of July.</span><br />