IMF tries to convince China for SL debt restructuring amidst delays
The prospect of receiving International Monetary Fund ‘Extended Fund Facility (IFF) facility in January and the first quarter of this year is vanishing as the government is still grappling to get assurance from its external creditors for debt restructuring, international analytical reports highlighted.
President Ranil Wcktreamsinghe recently revealed that IMF EFF will be further delayed till the first half of this year as the IMF board approval is unlikely in the first quarter of this year due to uncertainty of debt restructuring talks with creditors still under way.
These latest predictions have negated Central Bank Governor Nandalal Weerasinghe’s unsubstantiated statements of IMF board approval dead lines on December 22 and January 2023 exposing his non-credible utterances with hidden agenda of discrediting the present regime headed by President Ranil Wickremasinghe before the public, local analysts said.
According to Standard Chartered Bank’s latest debt elert report , IMF Executive Board approval for US$ 2.9 billion EFF slated to 2Q, negotiations with commercial creditors is likely to be pushed back to 2H and resolution to be by end-2023
The report warns achieving IMF’s qualitative and quantitative targets including timely restructuring of commercial debt could pose challenges, potentially disrupting EFF program
Opines risks remain in 2023 even after IMF board approval; politics and policy execution delays are key risks, it added.
However President Ranil Wickremesinghe, speaking on Sri Lanka’s ongoing debt restructuring program, stated that the government has already completed the negotiations with Japan – one of the three main bilateral creditors of the island nation including China and India.
President Wickremesinghe also mentioned that Sri Lanka has held discussions with China’s EXIM Bank and by now the government has commenced exchanging views in this regard.
“India’s Foreign Minister is scheduled to visit Sri Lanka on the 19th [of January] to discuss the debt restructuring process. We are proceeding with these activities gradually,” he added.
Stating that the only option Sri Lanka has left now is to seek the support of the IMF, the Head of State noted that the country cannot recover otherwise.
The International Monetary Fund (IMF) is in talks with China to try and convince the country to restructure Sri Lanka’s debt.
During a round-table media interaction, IMF Managing Director Kristalina Georgieva said that the IMF wants to help China understand both the whole issue of debt sustainability and what can be a pathway for their contribution.
Georgieva also said that the IMF is engaging with China to define a pathway for debt resolution of Chad, Zambia, and also Sri Lanka and Suriname.