China responds to concerns on debt restructuring
The Chinese embassy in Sri Lanka says that they hope Sri Lanka will work actively with China and work out a feasible solution expeditiously, amid concerns on debt restructuring by Chinese creditors.
Earlier today (01), the IMF and Sri Lanka announced to media that they reached a staff-level agreement to support Sri Lanka’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about US$2.9 billion.The embassy was responding to media queries raised after the IMF conditions for the loan also included receiving financing assurances from Sri Lanka’s official creditors and efforts by the country to reach an agreement with private creditors.
Responding to journalists during the media briefing, senior IMF mission chief – Peter Breuer had said, “If one creditor or creditors are not willing to provide these assurances, that would indeed deepen the crisis here in Sri Lanka and would undermine the repayment capacity.” Responding to concerns, a spokesman from the Chinese embassy said, “As a traditional friendly neighbor of Sri Lanka and a major shareholder of the International Monetary Fund, China has been always encouraging the IMF and other international financial institutions to continue to play a positive role in supporting Sri Lanka’s response to current difficulties and efforts to ease debt burden and realize sustainable development.”
“As to the bilateral financial cooperation, shortly after the Sri Lankan government announced to suspend international debt payments in April 2022, Chinese financial institutions reached out to the Sri Lankan side and expressed their readiness to find a proper way to handle the matured debts related to China and help Sri Lanka to overcome the current difficulties, ” he added.”We hope Sri Lanka will work actively with China in a similar spirit and work out a feasible solution expeditiously,” the spokesman further noted.