Debt deal between China, Lanka a ‘positive step forward’

COLOMBO: The agreement reached between Sri Lanka and the Export-Import Bank of China (Exim Bank) is a ‘positive step forward’ in the island nation’s debt restructuring process, the International Monetary Fund (IMF) says.

Commenting on the matter, IMF’s Senior Mission Chief Peter Breuer said the global lender stands ready to move forward with the first program review as soon as financing assurances from all official creditors are in place.

On October 11, the Ministry of Finance, Economic Stabilization & National Policies announced that Sri Lanka has reached an agreement on the key principles and indicative terms of a debt treatment with the Exim Bank of China.

The ministry also mentioned that the agreement in principle covers approximately USD 4.2 billion of outstanding debt.

The indicative terms agreed are expected to provide the necessary fiscal space for Sri Lanka to implement its ambitious reform agenda.