Monitoring Desk
ISLAMABAD/COLOMBO: Sri Lankan President Ranil Wickremesinghe said on Tuesday that China has agreed to restructure its loans, paving the way for the final obstacle for the cash-strapped country to get a bailout package from the International Monetary Fund (IMF).
Wickremesinghe told Sri Lankan parliament that China’s state-owned Exim Bank “sent a letter to the IMF” on Monday night expressing Beijing’s willingness to “restructure” credit to Sri Lanka.
Wickremesinghe hoped that the first tranche of the IMF package now will be released within the month.
He said, “as soon as the Exim Bank of China letter went to the IMF, I signed Sri Lanka’s letter of intent to go for the IMF programme.”
During its economic crisis, Sri Lanka defaulted on its $46-billion foreign debt last April, causing months of food and fuel shortages in the South Asian nation. The country owes just over $14 billion in bilateral debt to foreign countries, of which China holds 52 per cent.
Wickremesinghe’s government has been working to secure a $2.9 billion bailout package from the IMF to restore Sri Lanka’s ruined public finances.
His administration has ended subsidies on petrol and electricity, imposed sharp tax hikes, and made plans to sell off loss-making state enterprises to satisfy the bailout terms.
