The International Monetary Fund (IMF) stated yesterday (27) that it has welcomed the announcement of Sri Lanka’s finalisation of the country’s debt restructure agreements with its major creditor nations.
IMF’s Senior Mission Chief in Sri Lanka Peter Breuer said in a statement issued yesterday that the finalisation of the debt agreements by Sri Lanka with the creditors reached with China and other creditor nations in order to restructure about US$ 10 billion in bilateral debt is a key milestone which has taken the country one step closer towards completing its debt restructuring and restoring debt sustainability.Breuer stated that the IMF hopes that there will be swift progress on reaching agreements with external private creditors in the near future. Sri Lanka still needs to convince bondholders to restructure about US$ 12.5 billion in international bonds.
On Wednesday, June 26, deals were signed by Sri Lanka with China and other creditor nations after concluding negotiations with the Official Creditor Committee (OCC) and China Exim Bank to restructure about US$ 10 billion bilateral debt marking vital strides towards stabilising the country’s financial footing, bringing the nation closer towards the end of a debt restructuring process which commenced in September 2022 when the country’s reserves hit a record low which forced Sri Lanka to default on foreign debt for the first time.
The restructuring of the bilateral debt agreements with the creditor nations was one of the main conditions that was set by the IMF under a US$ 2.9 billion bailout programme which helped Sri Lanka to bring down inflation, stabilise its currency and improve state finances.
Varuna Dayaratne
