Sri Lanka to head to London for negotiations with private creditors on debt deal

After securing agreements in-principle from China and Official Creditor Committee (OCC) on debt treatment, Sri Lanka’s focus is now on securing a deal with its private creditors, President Ranil Wickremesinghe said.
“Our next step involves heading to London to engage in negotiations with private creditors,” Wickremesinghe said.
He made these remarks while participating in the inauguration of the Karaliya Convention Centre and Performing Arts at Kandy Municipality yesterday.
According to the most recent data released by the Finance Ministry, Sri Lanka’s total external debt amounted to US$ 36.6 billion as at June 30, 2023. Out of this, bilateral credit accounted for US$ 10.94 billion. 

However, Sri Lanka owes more to private creditors or to bondholders. As per the Finance Ministry data, Sri Lanka owed US$ 14.73 billion to commercial creditors as at June 30, 2023.
According to International Monetary Fund (IMF) estimates, Sri Lanka needs an overall debt reduction of US$ 17 billion to restore its debt sustainability. 
Meanwhile, Wickremesinghe said Sri Lanka’s successful emergence from bankruptcy has paved the way for the country to regain access to credit, which will facilitate the commencement of development initiatives in the near future.
“The upcoming year will witness a surge in development projects, marking a significant milestone achieved through agreements pertaining to loans from the IMF and other nations,” he said.
Wickremesinghe also cautioned against those who make misleading claims about Sri Lanka’s programme with the IMF.

“Some experts and politicians suggest renegotiating with the IMF. However, this is a misleading proposition. The IMF is not a singular entity. We engaged in discussions with numerous countries, meeting their leaders. 
Altering the terms now would mean our country will have to repay the debt anew. I am not in favour of such a scenario. It is crucial to ask the people if they are willing to return to bankruptcy or not,” he said.
He stressed that those opposing the current path should articulate alternative solutions if the programme with the IMF is rejected.