Debt restructuring talks underway with IMF, India, China: Sri Lanka President

Colombo: Sri Lanka has started debt restructuring talks with the IMF, India, and China, President Ranil Wickremesinghe said on Sunday, exuding confidence that if the discussions move forward in a “systematic way”, the country would tide over its worst economic crisis.

Addressing a gathering in the Siyambalanduwa district, Wickremesinghe said talks have also started with private creditors on debt restructuring.

“For the first time yesterday, we began talks with the IMF, China, Japan and India on lessening our debt burden,” he said.

“It will be difficult for us to pay back debt, still we have to find ways to lessen our debt burden. We are faced with a situation where we are unable to meet interest payments. But I’m hopeful that if our talks could be carried forward in a systematic way, we would be able to solve our problems,” he said.

The president said he spoke to the Chinese finance minister while Sri Lanka’s finance minister Shehan Semasinghe on Saturday started talks with India on debt restructuring in Washington.

He said the funds from the World Bank, the Asian Development Bank, the US and the EU were being used to pay for the island’s medicine and fertiliser imports.

Sri Lanka reached a staff-level agreement with the IMF in late August for a USD 2.9 billion rescue package over 4 years. Its completion hinges on assurances from Sri Lanka’s creditors on debt restructuring.

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

Sri Lanka is nearly bankrupt and has suspended repaying its USD 51 billion foreign debt, of which it must repay USD 28 billion by 2027.