The financially strapped South Asian country will also start formal negotiations for the debt it owes to bilateral creditors and overseas bondholders after the domestic debt operation, aiming to complete those parallel debt talks by September. Central bank and treasury officials said they expected that "exploring options for a domestic debt operation" will help achieve much-needed liquidity relief, including both local currency T-Bills and T-Bonds. Government officials told investors that only T-Bills held by the central bank would be considered for a debt rework, while a voluntary domestic debt operation was expected for the holders of $24 billion of T-Bonds. Sri Lanka is struggling with its worst economic crisis in more than seven decades. To that end, Sri Lanka has already frozen public recruitment and has hiked taxes and power tariffs by 66% this year.

---