Sri Lanka to present IMF debt restructuring and rescue packages to creditors

A vendor prepares Sri Lankan notes for bundling at a store in Colombo July 3, 2013. REUTERS/Dinuka Liyanawatte

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LONDON, Sept 18 (Reuters) – Crisis-hit Sri Lanka will make a presentation to international creditors on Friday, outlining the full extent of its economic woes and its plans to restructure debt and bail out billions of pounds. dollars from the International Monetary Fund.

Years of economic mismanagement combined with the COVID-19 pandemic plunged Sri Lanka into its worst economic crisis since its independence from Britain in 1948, leading it to default on its sovereign debt. Read more

The country’s finance ministry said in a statement via law firm Clifford Chance that an online call on September 23 would be open to all of its external creditors and would be “an interactive session” in which attendees could ask questions. .

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Sri Lanka’s woes came to a head in July when then-president Gotabaya Rajapaksa fled the country and resigned after violent public protests.

His replacement Ranil Wickremesinghe managed to strike a preliminary deal with the IMF which, if formalized, would provide the country with $2.9 billion in loans over four years.

“The authorities intend to update their external creditors on the most recent macroeconomic developments, the main objectives of the reform package agreed with the IMF (…) and the next steps in the debt restructuring process”, indicates press release dated September 17.

Veterans of the debt crisis cite particularly difficult elements in Sri Lanka.

The impoverished population that forced Rajapaksa to flee has yet to come to terms with Wickremesinghe, considered by many to be of the same political ilk, and who faces bristling opposition.

The country’s borrowings are so complex that estimates of the total range from $85 billion to well over $100 billion. Perhaps most difficult of all, the competing regional powers of China, India and Japan must also find common ground on how to reduce the debt owed to them by Colombo.

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Reporting by Marc Jones; Editing by Richard Chang

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