By
Meera Srinivasan
As Sri Lanka works hard to obtain financing assurances from its diverse creditors — a pre-requisite for the provisional $2.9 billion-IMF package — the loans obtained from China, the island nation’s largest bilateral lender, have come under sharp focus.
Earlier this week, Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe told reporters that if Sri Lanka missed the December deadline [to report to the IMF], “we still have time until January”. While authorities maintain that negotiations with creditors are “progressing well”, they are yet to spell out where exactly the government’s debt restructuring efforts stand, amid concerns over the apparent delay.
Months after opting for a pre-emptive and disorderly default on its $ 51 billion foreign debt, Sri Lanka reached a staff level agreement with the International Monetary Fund in September. The government said the programme would put Sri Lanka’s battered economy on a path of recovery and reform, making the bankrupt country eligible to borrow again from international sources.
The IMF made its support contingent on Sri Lanka obtaining adequate financing assurances from all its creditors. While private lenders, mainly holders of International Sovereign Bonds, account for the largest chunk of Sri Lanka’s external debt, China, India, and Japan are the top three bilateral creditors, and play a crucial part in the ongoing negotiations.











