India sends financial assurances to IMF ahead of Jaishankar’s visit

S. Jaishankar

Days ahead of India’s External Affairs Minister S. Jaishankar’s visit to Sri Lanka, the neighbouring giant has sent financing assurances to the International Monetary Fund (IMF), The Hindu reported. 

A top official source in Colombo has confirmed to The Hindu that “the written financing assurances from India were sent to the IMF Monday evening”.   

By taking the step that will help ease pressures on Sri Lanka, India becomes the first creditors to officially support the country’s debt restructuring programme. 

With the assurances extended by India, Sri Lanka comes one step closer to the much awaited US $ 2.9 billion bailout package from the IMF. 

The IMF was firm on the crisis-struck island nation receiving financing assurances from its official creditors and making a good faith effort to reach a collaborative agreement with private creditors.   

China, Japan and India are Sri Lanka’s three largest bilateral lenders. Having received the support from India, the island nation now awaits similar assurances from Japan and China to gain access to the IMF assistance.
Sources familiar with Sri Lanka’s ongoing negotiations with creditors said the Paris Club, of which Japan is a member, is likely to send its financing assurances “soon”, The Hindu reported. 

Following the staff-level agreement with the IMF in September 2022, President Ranil Wickremesinghe said efforts are underway to obtain the IMF support before the end of the year.

However, as negotiations with creditors did not conclude within the expected time frame, the bailout was delayed.
Meanwhile, Wickremesinghe told Parliament on Tuesday that the ongoing discussions with India and China have been a success.