India’s foreign minister S Jaishankar to visit Sri Lanka to hold talks on debt restructuring
Story highlights
China, Japan, and India are Sri Lanka’s three largest bilateral creditors, and it is believed that Colombo is counting on their cooperation for economic revival
India’s External Affairs Minister S Jaishankar is expected to make a visit to crisis-ridden Sri Lanka this week to discuss the debt restructuring process. “On January 19, the Indian foreign minister is expected to visit and we will continue to have debt restructuring talks with India,” Sri Lankan President Ranil Wickremesinghe said, according to PTI news agency.
The Sri Lankan president informed said that the country will be receiving $2.5 billion from the IMF, and nearly $5 billion from the World Bank and the Asian Development Bank.
“The total will be $7.5 billion. Adding the $3 billion from the restructuring of unprofitable government agencies can add up to $10 billion, which will enable the economy to recover and bring the country out of this suffering," he added.
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China, Japan, and India are Sri Lanka’s three largest bilateral creditors, and it is believed that Colombo is counting on their cooperation for economic revival.
Sri Lanka has been trying to get financial assurances from its major creditors, in order to secure a bailout package from the IMF.
The IMF bailout has been put on a halt as Sri Lanka pursues talks with creditors to meet the global lender’s condition for the facility.
Wickremesinghe said that he was looking forward to the IMF facility in three-four tranches, adding, “I want to lift this country out of the plunge sooner.”
The debt restructuring talks with Sri Lanka’s creditors began in September last year as warranted by its agreement with the IMF for the $2.9 billion facility over four years.
Since being hit by the unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, India has been providing financial assistance to its neighbours of nearly $4 billion during the year.
In January, India announced a $900 million loan to Sri Lanka to build up its depleted foreign reserves as the financial crisis began to unfold.
Later, it offered a USD 500 million credit line to Sri Lanka to fund the country's fuel purchases.
The credit line was later expanded to USD 700 million due to the sheer gravity of the situation.
Sri Lanka has been using Indian credit lines since early 2022 to import essentials and fuel after street protests erupted due to severe shortages of essentials.
(With inputs from agencies)
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