China came to the rescue in tough times, agreeing to reschedule Sri Lanka’s debt.
After debt restructuring by China, it will be easier for Sri Lanka to get a $2.9 billion package from the IMF.
According to the report of the British newspaper Financial Times, the IMF had kept the financial package for Sri Lanka in abeyance for several months.
Sri Lanka was persuading its lenders to reschedule the loans, with the IMF making the package conditional.
President Ranil Wickremesinghe told Parliament yesterday that his government has received a letter from the Export-Import Bank of China.
It is a state-owned bank that oversees China’s overseas investment.
The contents of the letter are not clear, but Sri Lankan officials say the letter confirms that Beijing will reschedule the loans in accordance with the terms set by the IMF.
India and Japan had also given similar assurances to Sri Lanka in January.
President Wickremesinghe said that after the IMF bailout package, financial support will also be received from the World Bank and the Asian Development Bank.
It should be noted that Sri Lanka currently owes 40 billion dollars to China, India, Japan and private bond holders.
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