Sri Lanka to present debt restructuring

LONDON (Reuters) – Sri Lanka will present to international creditors on Friday the extent of its economic problems as well as debt restructuring and bailout plans by the International Monetary Fund (IMF) worth billions of dollars.

Years of economic mismanagement, combined with the COVID-19 pandemic, have plunged the country into its worst economic crisis since gaining independence from Britain in 1948, the preventing it from repaying its sovereign debt.

The country’s finance minister has said, through law firm Clifford Chance, that the September 23 online call will be open to all its outside creditors and will be an “interactive session”. during which participants could ask questions.

Sri Lanka’s troubles came to a head in July when then-president Gotabaya Rajapaksa fled the country and resigned after violent public protests.

His replacement, Ranil Wickremesinghe, has managed to conclude a preliminary agreement with the IMF which, if formalized, will allow the country to obtain 2.9 billion dollars in loans over four years.

“The authorities intend to update their external creditors on the latest macroeconomic developments, the main objectives of the reform program agreed with the IMF and the next steps in the debt restructuring process,” the statement said. September 17.

Sri Lanka’s borrowings are so complex that estimates of the total range from $85 billion to over $100 billion. Competing regional powers China, India and Japan also need to find common ground on how to reduce the country’s debt.

(Report Marc Jones, French version Benjamin Mallet)

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