Sri Lanka has ‘successfully’ completed debt restructuring talks with India: President Wickremesinghe

COLOMBOS: Sri Lanka Having “successfully” completed debt restructuring negotiations with India, President Ranil Wickremesinghe said on Tuesday, a few days ago foreign minister S. Jaishankar‘s visit the island nation.
Sri Lanka, the country trying to secure a much-needed $2.9 billion bridging loan from International Monetary Fund (IMF), is trying to secure financial guarantees from its major creditors – China, Japan and India – which is a necessary condition for Colombo to receive the bailout.
The IMF bailout has stalled as Sri Lanka pursues negotiations with its creditors to meet the global lender’s condition for the facility.
“I can tell this council that the negotiations have been successful. We will have answers soon,” the president said. Wickremesinghe said in Parliament.
Jaishankar will arrive in Sri Lanka on January 19 for a two-day official visit, during which he will visit the country’s top leader.
Last week, Sri Lanka completed debt restructuring negotiations with Japan and President Wickremesinghe also held talks with China’s Exim Bank.
To widen a much-needed lifeline for a struggling neighbour, India gave Colombo nearly $4 billion in financial support last year.
In January 2022, India announced a US$900 million loan to Sri Lanka to build up its dwindling foreign exchange reserves as the financial crisis kicked in.
It then provided a $500 million line of credit to Sri Lanka to finance the country’s fuel purchases.
The credit line was later extended to $700 million due to the severity of the situation.
India’s credit lines since the beginning of 2022 have been used to import essentials and fuel after street protests erupted over severe shortages of essentials.
Sri Lanka began debt restructuring negotiations with its creditors last September as guaranteed by an agreement with the IMF on a $2.9 billion basis over four years.
It began negotiations with the IMF for a bailout after declaring default on its debt for the first time last April.
The IMF facility will allow the island nation to obtain bridging financing from markets and other lending institutions such as ADB and the World Bank.
Sri Lanka suffered an unprecedented financial crisis in 2022, the worst crisis since its independence from Britain in 1948, due to too little foreign exchange reserves, causing serious problems. political turmoil in the country that led to the overthrow of the almighty government. Rajapaksa family.


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