Sunday, August 14, 2022

Sri Lanka to submit debt-restructuring plan to IMF

The Sri Lankan government temporarily suspended foreign debt payments on April 12 due to a lack of foreign reserves for essentials.

• August 3, 2022
Prime Minister Ranil Wickremesinghe
Prime Minister Ranil Wickremesinghe [Photo Credit: BBC]

Sri Lanka is to submit a debt-restructuring plan to the International Monetary Fund (IMF) aimed at finalising a bailout package to emerge from an ongoing economic crisis.

The country President, Ranil Wickremesinghe, said this on Wednesday.

“It is our expectation to conclude the staff-level negotiations expeditiously and successfully,’’ Mr Wickremesinghe said.

He said this in reference to negotiations with the IMF while addressing a new parliamentary session.

Mr Wickremesinghe was elected by parliamentary vote on July 20, to fill the vacancy left by Gotabaya Rajapaksa, who fled the country amidst public protests.

“The finalisation of the debt-restructuring plan has commenced in collaboration with Lazard and Clifford Chance, who are international financial and legal experts,’’ the president said.

He explained that the plan would be submitted to the IMF and negotiations with the countries who provided loan assistance, as well as private creditors, would begin to arrive at a consensus.

The Sri Lankan government temporarily suspended foreign debt payments on April 12 due to a lack of foreign reserves for essentials.

The country’s economic crisis led to severe fuel, medicine and food shortages across the country, resulting in long queues.

Protests by the public followed, eventually leading former prime minister Mahinda Rajapaksa to step down on May 9, followed by his brother, the former president, on July 13.

Protesters have vowed to continue their campaign against Mr Wickremesinghe as well, as they consider him an ally of the Rajapaksas.

The new president has meanwhile invited all the parties in parliament to form a unity government to try to end the shortages. 


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