China must be treated like any other creditor once talks begin to restructure Sri Lanka’s debt, Indian Finance Minister Nirmala Sitharaman has told the International Monetary Fund and the World Bank.
“All creditors should be treated equally and with transparency,” Sitharaman said in an interview in Washington on Friday. “I have made this point generally and in the context of Sri Lanka.”
China ready to offer Sri Lanka ‘urgent aid’
Sri Lanka was seeking to borrow $1 billion from Beijing so it could repay existing Chinese loans due in July, as well as a $1.5 billion line of credit to purchase goods. The South Asian nation, which lacks dollars to pay for its imports, is also seeking help from neighboring India, the World Bank and the IMF.
Sitharaman said she also asked the IMF to consider rapid aid for middle-income Sri Lanka – usually given only to low-income countries – as the pandemic has destroyed the island’s tourism revenue. .
With falling foreign exchange earnings, Sri Lanka struggled to manage its external debt, which had risen in part due to loans from China to finance ambitious infrastructure projects. Sri Lanka owed around $3.5 billion in debt to China at the end of 2020, excluding loans to state-owned enterprises, central bank data showed.
How Sri Lanka landed in crisis and what it means: QuickTake
This year, it also has to pay $2.2 billion in principal and interest payments for dollar-denominated bonds and loans, with that number rising to around $2.7 billion a year in 2023 and 2024, according to the figures. available data compiled by Bloomberg.
Dear reader,
Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.
As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.
Support quality journalism and subscribe to Business Standard.
digital editor
Comments are closed.