March 7, 2023
2 mins read

China agrees to back Lanka’s debt restructuring

President Ranil Wickremesinghe on Tuesday informed Parliament that the government received a letter of assurance from the Chinese Exim Bank…reports Asian Lite News

Breaking the biggest barrier to receive the promised conditional International Monetary Fund (IMF) bailout package of $2.9 billion to help Sri Lanka’s cash-strapped economy, China has given assurance to help the island nations debt restructuring programme.

President Ranil Wickremesinghe on Tuesday informed Parliament that the government received a letter of assurance from the Chinese Exim Bank on Monday night and the letter of intent signed by the Central Bank Governor and himself was sent to the IMF immediately.

Wickremesinghe, who also the Finance portfolio, assured that once the IMF agreement is reached, the deal would be tabled in Parliament along with the draft of the government’s future plan and road map.

A delay by China the biggest bilateral creditor to the island nation accounting for 52 per cent, had been hampering Sri Lanka’s effort to get the much needed dollar bail out promised by the IMF in last September.

Referring to Sri Lanka’s attempt reach the IMF conditions to get the bailout, in January US Ambassador to Sri Lanka, Julie Chung urged China not to be a spoiler.

“For the sake of the Sri Lankan people, we certainly hope China is not a spoiler as they proceed to attain this IMF agreement,” she complained.

In an interview to the BBC on January the US Ambassador claimed that the greater onus to move with regard to Sri Lanka’s debt restructuring, a prerequisite for an IMF bailout, was on China, as the biggest bilateral lender.

“We hope that they do not delay because Sri Lanka does not have time to delay. They need these assurances immediately,” Ambassador Chung stated.

Accounting for 12 per cent of total debt, India, the third largest bilateral creditor to Sri Lanka after China and Japan, was the first to formally inform the IMF of its assurance for the external debt restructuring programme.

The closest neighbour to the crisis-hit country, India’s outstanding credit to Sri Lanka amounted to nearly $1.7 billion up to June last year.

Following India, in February the Paris Club of creditors announced its supports for the debt restructuring of Sri Lanka.

ALSO READ: China focus of Australian, Japanese PMs visits

Previous Story

New ministers swear-in before Prez, VP

Next Story

Russian reservists fighting with shovels, says UK intelligence

Latest from -Top News

Canada, US back in trade war?

U.S. President Donald Trump said that all ongoing trade talks with Canada will be terminated, with new tariffs possibly on the horizon. Canadian Prime Minister Mark Carney has described trade negotiations with

Supreme Court curbs judges’ powers to block Trump

The US Supreme Court has ruled that federal district judges do not have the authority to issue nationwide injunctions against President Donald Trump’s executive order targeting birthright citizenship, handing the administration a

Rubio to host Quad partners in Washington

The July 1 meeting comes amid growing complexity in intra-Quad relations….reports Asian Lite News The United States will host a high-level Quad Foreign Ministers Meeting on July 1 in Washington, D.C., as

US to slash funding for global war crimes probes

The recommendation, made quietly on Wednesday, includes terminating support for projects in Iraq, Sri Lanka, Nepal and the Gambia….reports Asian Lite News The Trump administration is pushing to drastically reduce US government

UAE credit soars to the top

S&P Global, Moody’s Investors Service, and Fitch Ratings — have all assigned strong sovereign credit ratings to the UAE In a strong show of confidence in the United Arab Emirates’ economic resilience
Go toTop

Don't Miss

Nearly 60 mn Chinese people affected by floods

Authorities said 3.5 million people needed emergency relocation and 203,000

Lanka begins repaying Bangladesh Loan

Amid a significant financial crisis in 2021, Sri Lanka had