China yet to respond positively to restructure Sri Lanka’s debt

By Easwaran Rutnam

China is yet to respond positively to restructure Sri Lanka’s debt, Justice Minister Wijeyadasa Rajapaksha said.

India and the Paris Club have given the International Monetary Fund (IMF) assurances on restructuring Sri Lanka’s debt.

Rajapaksha said that China is the remaining obstacle in Sri Lanka’s attempt to secure an IMF bailout package.

He said that Sri Lanka has met most of the conditions put forward by the IMF and China is now the only barrier.

Rajapaksha said that Sri Lanka has declared bankruptcy and it requires IMF support to be considered an economically stable country.

Chinese Foreign Ministry Spokesperson Wang Wenbin had said earlier that the?Export-Import Bank of China has already provided Sri Lanka with a letter to express support for its debt sustainability.

“The letter says that the Bank is going to provide an extension on the debt service due in 2022 and 2023, which means Sri Lanka will not have to repay the principal and interest due of the Bank?s loans during the above-mentioned period, so as to help relieve Sri Lanka?s short-term debt repayment pressure; meanwhile, the Bank would like to have friendly consultation with Sri Lanka regarding medium- and long-term debt treatment in this window period; and the Bank will make best efforts to contribute to the debt sustainability of Sri Lanka,” he said.

The Chinese Foreign Ministry Spokesperson said that the bank also noted that it will support Sri Lanka in its loan application to the IMF and will continuously call on commercial creditors (including the International Sovereign Bondholders) to provide debt treatment in an equally comparable manner, and encourage multilateral creditors to do their utmost to make corresponding contributions.

Wang Wenbin said China will continue to support relevant financial institutions in actively working out the debt treatment and will work with relevant countries and international financial institutions to jointly play a positive role in helping Sri Lanka navigate the situation, ease its debt burden and achieve sustainable development.?(Colombo Gazette)