Sri Lankan President Ranil Wickremesinghe told the country’s Parliament on Tuesday that the debt restructuring talks with India and China have been “successful”.
“We have had successful decisions with China and India in debt restructuring but that does not mean that we get funds overnight. We have to increase the revenue,” Wickremesinghe said.
New Delhi’s support for Colombo’s debt restructuring plan is expected to figure on the talks’ agenda during the upcoming visit of Indian Foreign Minister S. Jaishankar to Sri Lanka, as per reports.
A Chinese delegation, led by the Communist Party of China’s (CPC) vice minister of the International Department, is also in the country on a four-day visit till January 18, as per the Chinese embassy in Colombo.
The delegation met Wickremesinghe on January 14, during which Colombo requested Beijing’s support in the debt restructuring talks, as per the statement.
Meanwhile, Reuters also separately reported that New Delhi has written to the International Monetary Fund (IMF) to formally convey to the Western lender about India’s plan to roll over its debt to Colombo.
Financial Assurances from India, China Mandatory for IMF Bailout
Sri Lanka is obliged to secure “financial assurances” from India, China, Japan and its creditors in the Paris Club before it is able to access $2.9 billion in funds from the International Monetary Fund (IMF), as per the terms of the deal.
India and China are among Sri Lanka's biggest foreign lenders.
The IMF agreed to extend the loan to Sri Lanka in September in the wake of an unprecedented balance of payments (BoPs) crisis caused by depleting forex reserves.
The crisis, the worst in the nation’s post-independence history, led to countrywide shortages of food, fuel and other essentials.
In April last year, Colombo announced that it would be defaulting on its foreign debt repayments due to depleting coffers.