Sri Lanka using China Development Bank officials visit to push debt restructuring talk with Beijing: Minister Semasinghe

PTI | Colombo | Updated: 17-11-2022 19:39 IST | Created: 17-11-2022 19:39 IST
Sri Lanka using China Development Bank officials visit to push debt restructuring talk with Beijing: Minister Semasinghe
  • Country:
  • Sri Lanka

Cash-strapped Sri Lanka is using the ongoing visit of China Development Bank (CDB) officials here to push ahead its talks on debt restructuring with Beijing, a minister said on Thursday, as the country attempts to close a much-needed bailout package deal with the IMF.

Sri Lanka held talks with the International Monetary Fund (IMF) on October 16 on the release of a USD 2.9 billion rescue package by the Fund, the completion of which hinged on assurances from the country's creditors on debt restructuring.

Sri Lanka has large debt rollover volumes (Gross Financing Need) running up to 37 per cent of GDP in 2022, which the IMF wants to bring down.

On Thursday Sri Lanka's state minister of finance Shehan Semasinghe said that although the ongoing visit of CDB officials had no direct links to debt restructuring, the CDB would report back on Colombo's aim to have restructuring of the Chinese debt.

"The visit had no direct link to debt restructuring talks but we are trying to obtain financial assurances from China," Semasinghe told PTI.

He said he had met the CDB team while they held talks with the Treasury officials too on the ongoing Chinese projects in the country.

Sri Lanka held two rounds of talks with its external creditors- in late September and early November.

Talks have been held with China, India and Japan and also with private creditors who hold around 48 per cent of Sri Lanka's debt.

Semasinghe said the third round of talks would be held soon.

Sri Lankan President Ranil Wickremesinghe, who spearheads the debt management and talks with the IMF, said Sri Lanka was looking forward to receiving the IMF facility by December.

Sri Lanka, a country of 22 million people, plunged into financial and political turmoil earlier this year as it faced a shortage of foreign currencies. It declared bankruptcy in mid-April and has suspended repaying its USD 51 billion foreign debt, of which it must repay USD 28 billion by 2027.

India has provided a lifeline to Sri Lanka by granting assistance worth USD 4 billion to pay for fuel and essential commodities.

The Sri Lankan government in May appointed international legal and debt advisors for debt restructuring after the country declared its international debt default for the first time in history.

Meanwhile, early this week Chinese Foreign Ministry spokesperson Mao Nining told a media briefing in Beijing that China has been closely following the difficulties and challenges faced by Sri Lanka.

"We have provided support to Sri Lanka's socio-economic development to the best of our capacity. As for Sri Lanka's China-related debts, China supports relevant financial institutions in discussing with Sri Lanka and properly resolving them," Moa said, replying to a query on whether China has started talks with Sri Lanka on its debt restructuring to enable Colombo to secure an IMF loan.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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