COLOMBO, Sri Lanka (AP) — Sri Lanka said Wednesday that it has reached an agreement in principle with a group of creditors including India and Japan on debt restructuring, a crucial move toward unlocking a second instalment of a $2.9 billion bailout package from the International Monetary Fund.
The agreement with the Official Creditor Committee covers approximately $5.9 billion of outstanding public debt and consists of a mix of long-term maturity extension and reduction in interest rates, a statement from the country's Finance Ministry said.
It also said the agreement will facilitate a swift approval by the IMF Executive Board of the review of Sri Lanka’s IMF-supported program, allowing for the next tranche of IMF financing of about $334 million to be disbursed. The IMF said in September Sri Lanka’s economy was recovering, but it needed to improve its tax administration, eliminate exemptions and crack down on tax evasion.
Sri Lanka declared bankruptcy in April 2022 with more than $83 billion in debt — more than half of it to foreign creditors.
Its economy was plunged into crisis, with severe shortages of food, fuel and other necessities. Strident public protests led to the ouster of then-President Gotabaya Rajapaksa. The IMF agreed in March to a $2.9-billion bailout package, releasing the first payment shortly thereafter.
Sri Lanka needed financial assurances from its bilateral creditors in order to receive the second bailout installment.
The ministry said the debt treatment terms will be further detailed and formalized in a memorandum of understanding between Sri Lanka and the creditor committee, which is co-chaired by India, Japan and France and includes 17 countries. The memorandum will be “implemented through bilateral agreements with each OCC member in accordance with their laws and regulations,” it said.
___
This version corrects the name of the group in the agreement to the Official Creditor Committee, not Official Credit Committee.
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
See The Five Stocks Here
Wondering where to start (or end) with AI stocks? These 10 simple stocks can help investors build long-term wealth as artificial intelligence continues to grow into the future.
Get This Free Report
Like this article? Share it with a colleague.
Link copied to clipboard.
