Sri Lanka started formal talks last Friday as it seeks IMF board approval for the loan in December or January, local authorities said in a virtual presentation. - Reuters
COLOMBO: Sri Lanka aims to finalise debt-restructuring talks with international creditors by the second quarter of 2023, as it looks for early assurances from lenders to help unlock a US$2.9bil (RM13.3bil) loan from the International Monetary Fund (IMF).
Sri Lanka started formal talks last Friday as it seeks IMF board approval for the loan in December or January, local authorities said in a virtual presentation.
“The most effective way to obtain the financing assurances quickly is the creation of an ad-hoc bilateral creditor coordination platform allowing the official bilateral creditors to give their financing assurances to the IMF collectively after having debated among themselves,” the authorities said.
The South Asian nation, which fell into its first ever default in May, has said it would ensure transparency and equal treatment among creditors including China, Japan and India. But some of Sri Lanka’s bondholders see talks dragging on for months as they push for the inclusion of local debt and loans from non-state creditors in the restructuring.
Central bank governor Nandalal Weerasinghe said at the presentation last Friday the “perimeter of Sri Lanka’s debt exercise is still being considered” with the assistance of the debt advisers, according to sources. The issue of domestic debt is being looked at very carefully given the impact it may have on the stability of Sri Lanka’s banking sector and the overall macro fiscal framework, the people cited Weerasinghe as saying. — Bloomberg
