Dr. Nandalal Weerasinghe, the Chief of Sri Lanka’s Central Bank, expressed confidence that the country’s International Monetary Fund (IMF) program would secure approval in December 2023. During a Friday briefing at the Central Bank, Weerasinghe stated, “We will be able to get the IMF program approved within the month of December. We are making good progress, and what is required are assurances from the official bilateral creditors, that is both the OCC (creditor committee) and the Chinese Exim Bank.”
He emphasized that the approval, following the first review, would pave the way for additional financial support from the Asian Development Bank (ADB), World Bank, and IMF Budget Support, contributing to improved financing measures for the government.
China’s Separate Approach Complicates Debt Situation, Says Sri Lankan President
President Ranil Wickremesinghe of Sri Lanka, in an interview with India’s FirstPost, revealed that China’s separate approach to the nation’s debt treatment has posed challenges. Despite China being the largest bilateral creditor, Wickremesinghe highlighted that international sovereign bonds held by private creditors are the primary concern.
Wickremesinghe explained, “China has been in it separately; we negotiate with them separately. This has nothing to do with Sri Lanka or any other country. They are not satisfied with the terms they are getting from the IMF and the World Bank, they feel that they should have a bigger role to play in the IMF so they’ve decided to opt out of it and they’re going separately. It’s making life more difficult for all of us who are in debt.”
He clarified that China is sending a message to the IMF and others, leaving the resolution to be sorted out among major stakeholders.
China Assures Support and Participation in Debt Discussions
China’s Foreign Ministry Spokesperson, Wang Wenbin, stated that China is closely monitoring Sri Lanka’s difficulties and challenges, actively engaging in consultations on debt issues, and providing timely financing support. Wenbin noted that Chinese financial institutions have participated in creditors’ meetings and maintained friendly communication with other creditors to share progress on debt treatment.
US Calls for Transparency and Equal Approach in Debt Restructuring
US Ambassador to Sri Lanka, Julie Chung, urged China to share its debt restructuring proposal with other creditors for transparency. Speaking on ‘The People’s Platform’ program on News 1st, Chung emphasized the need for an equal and comparable approach by all creditors. She expressed hope that access to the proposal would enable Sri Lanka to move forward with IMF restructuring and address macro-economic policies and governance issues.
