Finance minister Nirmala Sitharaman attended a high-level meeting on Sri Lankan debt issues and expressed India’s commitment to support Colombo in dealing with its current economic crisis.
She emphasised that a collaboration among creditors is important to ensure transparency and equality in treatment of all creditors in the debt restructuring discussions. The high-level meeting took place on the sidelines of the International Monetary Fund (IMF)- World Bank (WB) Spring Meetings here on Thursday. Japan Finance Minister Suzuki Shunichi, Sri Lanka State Finance Minister Shehan Semasinghe and Emmanuel Moulin, Director General of the Treasury, France were present in the meeting. Sri Lanka President Ranil Wickremesinghe participated virtually, an official statement said.
The purpose of the event was to demonstrate the multilateral cooperation regarding the debt restructuring process among the creditors, together with Sri Lanka, it said. In the event, the ministers announced the launch of the debt restructuring negotiation process on Sri Lanka under the three Co-Chairs: India, Japan, and France, to lead coordinated debt restructuring of Sri Lanka, it said. Sri Lanka was hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves, sparking political turmoil in the country which led to the ouster of the all-powerful Rajapaksa family.
The IMF in September last year approved Sri Lanka a UD 2.9-billion bailout package over 4 years pending Sri Lanka’s ability to restructure its debt with creditors — both bilateral and sovereign bondholders. With assurances from creditors, the USD 2.9 billion facilities could get the IMF board approval in March.