IMF in talks with China to restructure Sri Lanka’s debt

The International Monetary Fund (IMF) is in talks with China to try and convince the country to restructure Sri Lanka’s debt.

During a round-table media interaction, IMF Managing Director Kristalina Georgieva said that the IMF wants to help China understand both the whole issue of debt sustainability and what can be a pathway for their contribution.

“We have engaged with the Chinese authorities, working on two very important issues: One, coordination among Chinese agencies that would allow all sources of debt to China to be part of the discussion for a solution. And this has been a long process and it is still continuing. China does not have the tradition of that coordination that exists in more mature lenders,” she said.

Georgieva also said that the IMF is engaging with China to define a pathway for debt resolution of Chad, Zambia, and also Sri Lanka and Suriname.

She said the IMF wants to help China understand both the whole issue of debt sustainability and what can be a pathway for their contribution.

“We have seen more willingness. Just to give one example, when we were in China, we asked to have a meeting with the two key agencies, the Ministry of Finance and the People’s Bank of China; as well as with the large lenders in China, Exim Bank and China Development Bank. They came for this meeting and we had a very constructive and frank discussion on these issues,” she added.

Speaking further, Georgieva said that India has been impacted by developments in Asia.

“One of the countries, Sri Lanka is a neighbor, Pakistan is a neighbor. These are countries that are volatile. And of course, the fact that China has slowed down so dramatically, it impacts for the whole of Asia. If I am in India today, I would worry more about what is happening in the rest of the world and how this is going to impact me,” she said.

Georgieva said that the IMF is counting a lot on India’s leadership on the G20 because it is such a critical time for the world to protect its own well-being by protecting the integrated global economy. (Colombo Gazette)