Japan, in collaboration with France and India, is anticipated to lead a group of creditor nations in reaching an agreement on debt relief and an extension of repayment deadlines for Sri Lanka, as reported by Japan’s Jiji News on Wednesday. Despite no official source being named, this development is crucial for Sri Lanka, which is grappling with its most severe financial crisis in decades.
As Sri Lanka attempts to navigate its debt restructuring efforts since the previous year, the potential agreement with this creditor nation group follows a recent deal with the Export-Import Bank of China, addressing approximately $4.2 billion in outstanding debt. The EXIM deal holds significance for Sri Lanka, aiming to clear the first review of the bailout by December 6 within the International Monetary Fund (IMF) executive board program. The successful review would pave the way for securing a second IMF tranche of around $334 million, according to the country’s finance ministry.
Beyond the financial implications, this approval is integral to obtaining further clarity on ongoing debt restructuring discussions with key bilateral creditors. Successful negotiations would unlock $330 million in funding and signify progress in the comprehensive four-year program. Source – Reuters
