Breakthrough in restructuring debts with China: Finance Secretary to visit Beijing soon

3 July 2023 08:59 am – 8      – 834

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In what appeared to be a breakthrough in the restructuring of external debts, China has pledged to fully cooperate in the process, and Finance Ministry Secretary Mahinda Siriwardane will travel to Beijing soon to work out nitty-gritties, Daily Mirror learns.

China is the largest bilateral creditor to Sri Lanka to be followed by India and Japan as the other two top lenders.. By the end of 2020, Sri Lanka owed China’s Exim Bank US $ 2.83 billion.in total, Sri Lanka owed Chinese lenders US $7.4 billion by end-2022, according to calculations by the China Africa Research Initiative. The Chinese government has authorized EXIM Bank to engage with the Sri Lankan authorities on debt restructuring.

Japan, India and France have now announced a common platform for talks among bilateral creditors to coordinate the restructuring of Sri Lanka’s debt.

Foreign Minister Ali Sabry who visited China recently held talks with EXIM Bank Chairman Wu Fulin. According to an informed source, the Chinese authorities had made constructive assurances on debt restructuring.

The source said China would observe discussions among Japan, India and France regarding Sri Lanka’s debt restructuring process. Sri Lanka has assured all that comparable treatment will be ensured to all the creditors. “The Finance Ministry Secretary will be travelling to China soon to work out arrangements for debt restructuring. It will be comparable treatment to all. China will observe agreements with other creditors. Afterwards, it will agree to a bilateral arrangement with Sri Lanka,” the source said.

Parliament approved on Saturday the government’s Domestic Debt Restructuring (DDR) programme.(Kelum Bandara)

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