Photograph credit: unsplash
Money-strapped Sri Lanka is looking for a 10-year moratorium on its international debt, President Ranil Wickremesinghe’s workplace mentioned yesterday (March 20) on the eve of a desperately wanted US $ 2.9 billion Worldwide Financial Fund (IMF) bailout.
Wickremesinghe’s workplace quoted him as saying the extensively anticipated IMF rescue “will solely give us a respiration house the place they may say we’re now not bankrupt”.
“All the cash we’ve got to repay this 12 months, I hope we will probably be given no less than 10 extra years to repay it,” Wickremesinghe informed a gathering of scholars in Colombo on Sunday.
He didn’t give particulars of his plans to restructure Sri Lanka’s US $ 46 billion exterior debt.
Sri Lanka defaulted on its international debt in April 2022 because the nation plunged into its worst financial disaster, operating out of money to finance even essentially the most important imports and inflicting large social unrest.
Widespread protests over financial mismanagement, acute shortages of meals, gas and medicines and runaway inflation pressured Wickremesinghe’s predecessor Gotabaya Rajapaksa to flee the nation and resign in July.
The IMF’s govt board was anticipated to log off on Colombo’s bailout software later yesterday after a protracted delay in securing monetary assurances from China, Sri Lanka’s largest bilateral lender.
Beijing had mentioned this 12 months it was providing a two-year moratorium on its loans to Sri Lanka however the concession fell wanting the IMF expectations for the sustainability of the island’s debt.
Wickremesinghe had mentioned after China agreed to restructure its loans that he anticipated the primary tranche of the US $ 2.9 billion IMF bundle can be made obtainable throughout the month.
Officers concerned within the negotiations mentioned the phrases of debt restructuring have to be finalised and agreed by all events earlier than June, when the IMF was anticipated to evaluation the bailout programme.
“Sri Lanka will be unable to attract down the second tranche except a debt restructuring plan is agreed with all collectors,” mentioned one of many officers, who requested to not be recognized.
Colombo can be banking on the IMF deal to unfreeze billions of {dollars} in international support for tasks suspended since Sri Lanka defaulted on its loans final 12 months.
The federal government has already doubled taxes, elevated vitality tariffs threefold and slashed subsidies in an effort to fulfill the preconditions of the IMF bailout.
The austerity measures have sparked widespread protests and led to strikes that crippled the well being and logistics sectors final week.
Wickremesinghe has mentioned he had no different however to go together with an IMF programme.
Sri Lanka’s financial system shrank by a report 7.8 % final 12 months, because it grappled with its worst international alternate disaster since independence from Britain in 1948.
(AFP)
