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Money-strapped Sri Lanka is looking for a 10-year moratorium on its overseas 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 yr, I hope we shall be given at the least 10 extra years to repay it,” Wickremesinghe instructed 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 overseas debt in April 2022 because the nation plunged into its worst financial disaster, working out of money to finance even essentially the most important imports and inflicting huge 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 out on Colombo’s bailout utility later yesterday after an extended delay in securing monetary assurances from China, Sri Lanka’s largest bilateral lender.
Beijing had mentioned this yr 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 inside the month.
Officers concerned within the negotiations mentioned the phrases of debt restructuring should be finalised and agreed by all events earlier than June, when the IMF was anticipated to evaluate the bailout programme.
“Sri Lanka won’t be able to attract down the second tranche until a debt restructuring plan is agreed with all collectors,” mentioned one of many officers, who requested to not be recognized.
Colombo can also be banking on the IMF deal to unfreeze billions of {dollars} in overseas support for initiatives suspended since Sri Lanka defaulted on its loans final yr.
The federal government has already doubled taxes, elevated power tariffs threefold and slashed subsidies in an effort to satisfy 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 along with an IMF programme.
Sri Lanka’s financial system shrank by a report 7.8 % final yr, because it grappled with its worst overseas alternate disaster since independence from Britain in 1948.
(AFP)
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