Sri Lanka met with bondholders in Washington this week to negotiate a debt exchange, aiming to expedite its exit from default, Central Bank Governor Nandalal Weerasinghe confirmed, as reported by Reuters.
The discussions, held alongside the IMF/World Bank meetings, seek to quickly remove Sri Lanka from the “default category,” Weerasinghe said. Citibank will act as the dealer manager to oversee a consent solicitation, the next phase in the process to resolve the default.
Sri Lanka entered default for the first time in 2022 amid an economic crisis. In September, it reached a preliminary agreement with creditors to restructure $12.5 billion in international bonds, with the proposal receiving backing from the IMF and official bilateral creditors earlier this month.
Weerasinghe noted the next IMF program review will be delayed, though no specific timeline was given. The IMF recently announced continued collaboration with Sri Lanka’s economic team to determine a date for the third review.
Looking ahead, Weerasinghe anticipates the Sri Lankan economy could grow by “around 3%” in 2025, contingent on the pace of ongoing economic reforms.
