Japan, India and France on Thursday in the margins of the Spring Meetings announced the launch of the debt restructuring negotiation process on Sri Lanka.
The three creditor countries have been closely working on toward a coordinated debt restructuring for Sri Lanka and launched a common platform for talks among bilateral creditors to coordinate restructuring Sri Lanka’s debt.
Japanese Finance Minister Shunichi Suzuki Ms. Nirmala Sitharaman, India’s Minister of Finance and Mr. Emmanuel Moulin, Director General of the Treasury of France, as the traditional representative of the Paris Club of rich creditor countries launched the event at the IMF Headquarters in Washington, DC.
President Ranil Wickremesinghe as Sri Lanka’s Minister of Finance joined via online and State Minister of Finance Mr. Shehan Semasinghe and Senior Management Staff of IMF participated in person.
However, China, the major creditor of Sri Lanka was not present.
Japanese Finance Minister Shunichi Suzuki told the press briefing following the event said the platform is open to all creditors and expressed hope China will join in the process.
“The basic idea of this is to have many related countries to participate. So, of course, it’s appropriate if China joins,” Suzuki told reporters at the briefing.
Earlier Thursday at the Asia and Pacific Department Press Briefing Krishna Srinivasan, Director of the Asia and Pacific Department of IMF responding to reporters on Sri Lanka’s debt restructuring said the decision on how the restructuring happens in terms of providing debt relief, varies.
“It has been negotiated between Sri Lanka and its creditors. Now, it could take the form of principle haircuts, extension of maturity and interest rate reduction. So, what form it takes has been negotiated between Sri Lanka and its creditors, and we (IMF) don’t get involved in that,” he said.
Debt relief is expected to contribute about 17 billion to close the Balance of Payment financing gap in 2023 to 2027, which is the overall gap is about 24 billion. The remainder of this gap is covered by financing from the international financing institutions.
Srinivasan further said that Sri Lanka is expected to outline a strategy or a blueprint, engage with creditors later this month, and that’ll provide a basis for engaging with the creditors on the restructuring.
Courtesy: Colombo Page
