Sri Lanka nears debt restructuring deal

By Nada Ali On Jun 25, 2024

Sri Lanka is expected to sign bilateral debt restructuring agreements with Japan and India on Wednesday, Foreign Minister Ali Sabry confirmed to Reuters on Tuesday.

The nation defaulted on its foreign debt in May 2022 due to a severe decline in foreign exchange reserves, pushing its economy to the brink. A crucial step towards economic recovery came in November 2023 when Sri Lanka reached a provisional agreement with the Official Creditor Committee (OCC), co-chaired by Japan, France, and India. This agreement paved the way for a $2.9 billion bailout package from the International Monetary Fund (IMF).

The IMF recently approved the second review of Sri Lanka’s bailout programme, stressing the need to finalise the MoU with the OCC and agreements with the Export-Import Bank of China quickly. Signing deals with Japan and India shows progress in meeting these obligations.

Attribution: Reuters

Ali Sabry debt restructuring agreement Export-Import Bank of China (CHEXIM)Foreign Minister Ali Sabry France IMF India Japan