Debt restructuring : Sri Lanka requests China to be more accommodative

• Daily Mirror learns  the Chinese offer is insufficient to meet the IMF criterion for approval of the US $ 2.8 billion programme
• It is the largest bilateral creditor with a loan component of US $ 5.6 billion given to Sri Lanka

By Kelum Bandara 

In its effort to secure the programme with the International Monetary Fund (IMF) to revive the crisis ridden economy, the Sri Lankan authorities are requesting the Chinese authorities to be more accommodative in its cooperation for this purpose, Daily Mirror learns.   

China previously announced that it will offer a two-year moratorium on debts obtained from its EXIM Bank. China accounts for ten percent of Sri Lanka external borrowings. 

However, it is the largest bilateral creditor with a loan component of US $ 5.6 billion given to Sri Lanka.  Daily Mirror learns that the Chinese offer is insufficient to meet the IMF criterion for the approval of US $ 2.8 billion programme.   

The Sri Lankan authorities are now in touch with Beijing requesting it to be more accommodative to secure the IMF programme. India has fully assured the IMF that it will fully cooperate with Sri Lanka’s debt restructuring process.  However, there is a school of thought in Sri Lankan circles that the country should have reached China for financial cooperation earlier to avoid default.     

• There is a school of thought in SL circles that the country should have reached China for financial cooperation earlier to avoid default