China paves way for IMF aid to Sri Lanka

China paves way for IMF aid to Sri Lanka

The austerity measures put in place by the government as well as the shortages and price increases that Sri Lanka has suffered for almost two years are fueling the discontent of the population (here, a demonstration in Colombo, on March 7). ISHARA S. KODIKARA/AFP

Beijing’s debt relief will unlock a $2.9 billion bailout.

China has finally taken the step requested for months. This important creditor of the Sri Lanka, a country in serious economic crisis, finally agreed to restructure, like Japan and India, Colombo’s debt. This late agreement paves the way for the aid plan of the International Monetary Fund (IMF) for the sum of 2.9 billion dollars (2.7 billion euros).

The Chinese bank Exim has written to the organization which monitors the world economy to inform it of Beijing’s desire to “restructure” the credits granted to Sri Lanka, explained Tuesday the president, Ranil Wickremesinghe, in front of the Parliament of Colombo. “Sri Lanka has now obtained the necessary assurances from its main bilateral donors. This paves the way for the study of the plan by the board of directors on March 20 with a view to validation”, confirmed Krishna Srinivasan, IMF director for Asia and the Pacific. “A board deal could also open up funding…

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