By Uditha Jayasinghe
COLOMBO (Reuters) – Sri Lankan authorities will formally hold talks with international creditors on Friday to start the process of restructuring billions of dollars of its debt and share plans to tackle the island’s worst economic crisis in more than seven decades.
The success of the restructuring process is critical for the nation of 22 million to secure final approval for a $2.9 billion loan from the International Monetary Fund and subsequent financing from other global agencies.
The money will help the island nation overcome an acute shortage of food and fuel that sparked sweeping street protests for months this year and led to the ouster of then-President Gotabaya Rajapaksa.
Sri Lanka’s finance and other officials plan to hold a virtual interactive session to share the objectives of its loan package agreed with the IMF on Sept. 1 and the next steps of the debt restructuring process.
Its presentation to the creditors will be made public after the event. The government has already held preliminary restructuring talks with neighbour India and diplomats based in Colombo.
“There was a very positive response from the meeting with ambassadors chaired by the president on Thursday,” an official at the president’s office said, speaking on condition of anonymity.
“Sri Lanka is focused on trying to get the IMF deal finalised by December or early next year.”
Sri Lanka’s foreign currency debt was $47.3 billion as of end-2021 and local-currency debt at $53.6 billion, according to an update from the Ministry of Finance in August. China, Japan and India are its top bilateral creditors.
The foreign currency debt includes $13 billion in international sovereign bonds held largely by private creditors, such as asset managers BlackRock and Ashmore.
(Writing by Krishna N. Das; Editing by Raju Gopalakrishnan)
Global Banking & Finance Review
Why waste money on news and opinions when you can access them for free?
Take advantage of our newsletter subscription and stay informed on the go!
By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact
Business4 days ago
Leverage the customization revolution to promote your brand
Business4 days ago
Bluprintx strengthens sales and marketing leadership to drive global growth-as-a-service expansion
Top Stories3 days ago
Reconsidering climate risk: a return to valuation fundamentals
Top Stories4 days ago
Britain sets out marketing rules for EU investment funds in the UK