AMN/ WEB DESK
In a virtual meeting of creditor nations, co-chaired by Japan, France, and India, Sri Lanka received positive responses from 26 countries and 19 creditors, regarding the coordination of loan restructuring efforts. The discussions centered around conforming to the debt rollover ceilings set by the International Monetary Fund (IMF) to ensure debt sustainability for Sri Lanka in the future. The Paris Club, known for its expertise in restructuring debt for defaulted nations, has been actively involved in the process, with India formally joining the group of Western lenders.
Sri Lanka, which has faced monetary instability and forex shortages, accumulated a significant amount of international sovereign bonds and Chinese budget support loans over the past decade. As per reports, Sri Lankan government’s external debt stood at over 36 billion dollars by the end of 2022, with an additional 1.647 billion dollars in sovereign guaranteed debt in state enterprises. With recent borrowings during periods of monetary instability, Sri Lanka’s total external debt reached 41.47 billion dollars.
The involvement of multiple stakeholders in Sri Lanka’s loan restructuring process is expected to contribute to a comprehensive and coordinated relief plan within the limits prescribed by the IMF’s debt analysis.