Colombo (TIP): India on December 8 said it will continue to be a “steadfast friend” of Sri Lanka and is committed to strengthening the bilateral economic partnership for mutual benefit, as it thanked President Ranil Wickremesinghe for holding “successful” talks on debt restructuring. Wickremesinghe during the inaugural session of the Sri Lanka Economic Summit 2022 on Monday said that it held “successful” talks with India on debt restructuring and will also begin discussions with China, as the island nation scrambles to get assurances from major bilateral creditors to close a crucial deal with the IMF. Sri Lanka, which is trying to secure a USD 2.9 billion bridge loan from the International Monetary Fund (IMF), is also looking at financial assurances from its major creditors—China, Japan and India—which is the requisite for Colombo to get the bailout package.
Replying to Wickremesinghe’s tweet on holding the “successful” talks on debt restructuring, the Indian High Commission here tweeted, “Thank you H.E President @RW_UNP. #India will continue to be a steadfast friend of #SriLanka and stand by our brethren. We are committed to strengthening the bilateral economic partnership for mutual benefit.” Sri Lanka has large debt rollover volumes (Gross Financing Need) running up to 37 per cent of GDP in 2022, which the IMF wants to bring down. The exact GFN target is not known, but other countries under restructuring have levels around 15 per cent, and some less, the EconomyNext reported.
China, however, continues to be ambivalent about its stand on loans to Sri Lanka as it is set for talks with the IMF for debt restructuring of several recipient countries of Chinese finances, which are defaulting on their external debt. Sri Lanka, which went bankrupt earlier this year, had announced a default on over USD 51 billion in foreign loans, including that of China. China has also announced assistance of 500 million RMB (about USD 74 million) for the supply of essential goods, but it remained silent about former Lanka president Gotabaya Rajapaksa’s request to defer the loan repayment. India has rushed about USD 4 billion in assistance in the form of line credit and other modes to help Sri Lanka this year, which has virtually declared insolvency and defaulted on all foreign loans. (PTI)