The Sri Lankan government understands that China is willing to support a plan to restructure Sri Lanka’s debt, which is crucial to facilitate a loan from the International Monetary Fund to help the country out of the very serious economic crisis in which it is immersed.
«We are on the right track to meet the IMF’s requirements,» said State Secretary for Finance Shehan Semasinghe in an interview with Bloomberg on Sunday, who intends to confirm with the IMF in the near future whether the restructuring is sufficient collateral to receive the approximately 2.7 billion euro loan.
China’s guarantee comes days after India assured the IMF that it will back Sri Lanka’s debt restructuring plans.
The president, Ranil Wickremesinghe, held a virtual meeting with the head of Exim Bank earlier this month, while a delegation from China also visited the nation in mid-January. Sri Lanka also concluded debt restructuring talks with Japan last week.
Sri Lanka was targeting IMF board approval in the first quarter of 2023 to receive much-needed funds to save an economy that has plunged further into recession amid sky-high inflation and high borrowing costs, key factors in last year’s popular revolution that led to a change of government.
«I am sure that the Paris Club will also lend its support,» the Secretary of State has said of this informal group of Western bilateral creditors.
It may be recalled that Sri Lanka has nearly 50 billion euros in foreign currency debt, of which about 10 billion is split mainly between China, Japan and India, according to government data.
Source: (EUROPA PRESS)
