Helping Sri Lanka address its debt issue a priority for Japan - top financial diplomat

Japan says it is treating Sri Lanka as one of its priorities when it comes to helping countries in debt but Japan was not sure when creditors aiming to extend its loans would meet.

Japan's top finance diplomat, Masato Kanda, told Reuters that Japan is closely coordinating with international organs such as Paris club or IMF in order to ensure participating of non-Paris Club members such as China and India.

He further said while aggressive U.S. interest rate increased last year weighed on emerging market dollar-denominated debt, middle-income countries had been left without an international arrangement to address the debt crisis.

"It is desirable to work with these non-Paris Club countries in the same way with the Common Framework," he said, referring to a Group of 20 mechanism designed to provide a swift and comprehensive debt overhaul to nations buckling under debt burdens after the COVID-19 shock.

"If this realised, it would pave the way for other middle-income countries to carry out with debt restructuring."