COLOMBO: Sri Lanka’s agreements with China and other creditor nations to restructure about $10 billion in bilateral debt brought it a step closer towards restoring debt sustainability, the International Monetary Fund (IMF) said on Thursday.
The island nation signed deals with China and other creditor nations to restructure about $10 billion in bilateral debt on Wednesday, helping it approach the end of a restructuring process that began in September 2022 after its reserves hit record lows and forced it to default on foreign debt for the first time.
Sri Lankan officials in Paris inked the agreement with the Official Creditor Committee (OCC) co-chaired by Japan, India and France that have lent a combined $5.8 billion.The committee is now awaiting details of a separate agreement that was signed with China EXIM Bank to rework $4.2 billion to be shared with them to ensure comparability of treatment, OCC said in a statement.
Sri Lanka, however, still needs to convince bondholders to restructure about $12.5 billion in international bonds.“We hope that there will be swift progress on reaching agreements with external private creditors in the near future,” Peter Breuer, IMF’s senior mission chief for Sri Lanka, said in a statement.
Bilateral lenders said they hoped an agreement with bondholders would be “on terms at least as favourable as the terms offered by the OCC”.The restructuring of bilateral debt agreements was one of the key conditions set by the IMF under a $2.9 billion bailout programme that helped Sri Lanka tame inflation, stabilise its currency, and improve government finances.
The central bank estimates the economy will expand 3.0 per cent in 2024 after contracting 2.3 per cent last year.Sri Lanka, whose total external debt is $37 billion, also has to finalise arrangements with China Development Bank to restructure debt of $2.2 billion, according to latest finance ministry data.
A Vlektra bike seen in this undated image.— Instagram@V.lektraKARACHI: Pakistan’s pioneering electric motorcycle...
The physical possession of the property has been handed over to SIUT pursuant to the 90 per cent payment of the sale...
A jeweller waits for a customers at a shop in Karachi on June 26, 2024. — AFPKARACHI: Gold prices in the local...
Investors sit in front of a board showing stock information at a brokerage house on the first day of trade in China...
People walk past official campaign posters of French presidential election candidates Marine le Pen, leader of French...
Flood victims gather to receive food handout in a camp following rains and floods during the monsoon season in Sehwan ...