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HomeEconomyChina Export-Import Bank Offers Sri Lanka Debt Extension - Letter

China Export-Import Bank Offers Sri Lanka Debt Extension – Letter

By Devjyot Ghoshal and Uditha Jayasinghe

NEW DELHI/COLOMBO (Reuters) – China Export-Import Bank has offered Sri Lanka a two-year debt moratorium and said it will, according to Reuters. A letter arrived in support of the country’s efforts to secure a $2.9 billion loan from the International Monetary Fund.

India wrote to the IMF earlier this month that it would commit to supporting Sri Lanka with financing and debt relief, but the island nation also needs China’s support to reach a final deal with its global lender. protocol.

January in China However, a Sri Lankan source with knowledge of the matter said the letter sent to the finance ministry may not be enough for Sri Lanka to Get immediate IMF approval for critical loans.

Regional rivals China and India are the largest bilateral lenders to Sri Lanka, a country of million people facing seven The worst economic crisis in a decade.

According to the letter, the Export-Import Bank of China said it would “defer 2020 and

debt repayment due principal with interest as an immediate contingency measure at the request of Sri Lanka”.

At the end of 83, the Export-Import Bank of China loaned Sri Lanka $2. According to a report released by the International Monetary Fund in March last year, 22 billion U.S. dollars, accounting for 3.5% of the island’s debt.

“…you will not have to repay the principal and interest of the bank loan during the said period,” the letter said.

“At the same time, we hope to expedite the settlement of fixed-term debts with you on the medium and long-term-this window period.”

Sri Lanka owes US$7.4 billion to Chinese creditors, accounting for its Nearly a fifth of public external debt bt by the end of last year, calculations by the China-Africa Research Program show.

“The Bank will support Sri Lanka’s application for the IMF’s Extended Fund Facility (EFF) to help ease liquidity strains,” the letter said. Funding provided by India to the IMF.

“China is expected to do more,” the source said, “It is much less than what they asked and expected.”

Sri Lanka’s foreign and finance ministries, as well as China’s foreign ministry, did not immediately respond to questions from Reuters.

Sri Lanka’s central bank governor, P. Nandalal Weerasinghe, said on Tuesday that the country wanted assurances from China and Japan, another major bilateral lender, that a debt restructuring would be completed soon.

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