Japan, India and France to announce Sri Lanka’s debt restructuring negotiation process

Japan, India and France are scheduled to hold a press briefing on Thursday (13 April) to announce the launch of the debt restructuring negotiation process on Sri Lanka.

International Monetary Fund (IMF) communicated this quoting the Japanese Finance Ministry.

Accordingly, the finance ministers of the three creditor countries – Shunichi Suzuki, Bruno Le Maire and Nirmala Sitharaman – will join the said press briefing planned to be held on the margins of the Spring Meetings of the IMF and the World Bank Group in Washington DC.

The three creditor countries have been working closely for a coordinated debt restructuring process for the island nation.

President Ranil Wickremesinghe and Finance State Minister Shehan Semasinghe are expected to join the live streaming of the press briefing.

In addition, the IMF, World Bank and other international organizations as well as the private sector will participate in the debt restructuring discussions.

The IMF had made Sri Lanka’s debt restructuring a prerequisite for granting the USD 2.9 billion bailout. Its Executive Board approved a 48-month extended arrangement under its Extended Fund Facility (EFF) with an amount of SDR 2.286 billion (about USD 3 billion) to Sri Lanka following financing assurances from the creditors.

Sri Lanka, which drew its first tranche of the USD 3 billion bailout programme, has already met an instalment to pay back an Indian line of credit which the island nation obtained early last year just before announcing the debt default.

The IMF bailout, the 17th in Sri Lanka’s history, was approved following prolonged discussions over Colombo’s unsustainable debt.

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 a major political and humanitarian crisis in the island nation.