https://sputniknews.in/20221214/sri-lankan-bail-out-package-in-limbo-because-it-lacks-creditors-assurance-91692.html
Sri Lankan Bail-out Package in Limbo Because It Lacks Creditors' Assurance
Sri Lankan Bail-out Package in Limbo Because It Lacks Creditors' Assurance
Sputnik India
Debt-ridden Sri Lanka is seeking to close pacts with commercial and bilateral creditors to meet the conditions for the $2.9 billion IMF bailout package.
2022-12-14T18:46+0530
2022-12-14T18:46+0530
2022-12-14T18:46+0530
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Sri Lanka is likely to miss out on the intended formal approval of the $2.9Bln bail-out from the International Monetary Fund (IMF) by the end of this year, State Minister of Finance Shehan Semasinghe suggested on Wednesday. The minister explained that despite some promising discussions, the government is still working hard to complete the requisite process by early next year.Colombo has an external debt of over $63Bln, primarily from multi-lateral financial institutions and venture capitalists in the West. China, India, and Japan are major bilateral creditors, whose loans make up around 30 percent of the country's total debt. Announcing a preliminary staff-level agreement with cash-strapped Sri Lanka in September, the Washington-based lender made stringent demands, including debt relief and new loans from the island nation’s creditors to release $2.9Bln for the country.Last week, Sri Lanka’s Central Bank Governor Nandalal Weerasinghe said that China is a “little late to come into the [debt restructuring] process owing to its internal issues.”The Governor noted that Sri Lanka has had two meetings with creditors on a “transparent and comparable basis”.Sri Lanka plunged into an unprecedented crisis earlier this year because of “financial mismanagement” by the previous government led by Gotabaya Rajapaksa, who had to resign and fled the country after a civilian uprising in July.The island nation of 22 million people has defaulted on its dollar debt to secure food and fuel imports.
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debt of sri lanka in 2022, sri lanka economic crisis, sri lanka total debt 2022, sri lanka foreign debt 2022, china debt
debt of sri lanka in 2022, sri lanka economic crisis, sri lanka total debt 2022, sri lanka foreign debt 2022, china debt
Sri Lankan Bail-out Package in Limbo Because It Lacks Creditors' Assurance
Debt-ridden Sri Lanka is seeking to close agreements with commercial and bilateral creditors to meet the conditions for the $2.9Bln IMF bail-out package.
Sri Lanka is likely to miss out on the intended formal approval of the $2.9Bln bail-out from the International Monetary Fund (IMF) by the end of this year, State Minister of Finance Shehan Semasinghe suggested on Wednesday.
"Sri Lanka has yet to receive financial assurances from our bilateral creditors. The creditors have indicated their intention to support Sri Lanka and we are thankful to them," the minister said.
The minister explained that despite some promising discussions, the government is still working hard to complete the requisite process by early next year.
Colombo has an external debt of over $63Bln, primarily from multi-lateral financial institutions and venture capitalists in the West. China, India, and Japan are major bilateral creditors, whose loans make up around 30 percent of the country's total debt.
Announcing a preliminary staff-level agreement with cash-strapped Sri Lanka in September, the Washington-based lender made stringent demands, including debt relief and new loans from the island nation’s creditors to release $2.9Bln for the country.
Media reports suggest that the island nation is looking to introduce a “Most Favored Creditor” clause to assuage doubts among creditors, primarily China, which holds half of the bilateral loans.
Last week, Sri Lanka’s Central Bank Governor Nandalal Weerasinghe said that China is a “little late to come into the [debt restructuring] process owing to its internal issues.”
The Governor noted that Sri Lanka has had two meetings with creditors on a “transparent and comparable basis”.
Sri Lanka plunged into an unprecedented crisis earlier this year because of “financial mismanagement” by the previous government led by Gotabaya Rajapaksa, who had to resign and fled the country after a civilian uprising in July.
The island nation of 22 million people has
defaulted on its dollar debt to secure food and fuel imports.
