Japan, France and India on Thursday will announce a new platform for creditors to coordinate restructuring of Sri Lanka's debt, said Japanese Finance Minister Shunichi Suzuki on Wednesday as reported by Reuters. The Japanese FM also added that it would be nice if China also decided to join the effort.
Japan, who is the chair of this year's Group of Seven (G7) meeting, has been putting efforts to address debt vulnerabilities of middle-income countries like Sri Lanka as among priorities for debate, said the report.
Suzuki in a news conference after the G7 finance leaders meeting said that the announcement of the new platform that is initiated by Japan, France and India would be made on Thursday. Japan's finance minister Suzuki said, "We altogether made a great effort to set up the framework." Suzuki also added, "I hope many countries will participate. It will be very nice if China will join."
According to Reuters, the platform will consist of a series of meetings of the creditor nations to discuss the debt.
Finance Minister Nirmala Sitharaman to be part fo the launch
Union Finance Minister Nirmala Sitharaman will join Suzuki and France's Director General of the Treasury Emmanuel Moulin in Washington on Thursday to announce Sri Lanka's debt restructuring negotiations process, the International Monetary Fund has announced. The three creditor countries have been working closely for a coordinated debt restructuring for Sri Lanka, the statement said.
Sri Lankan President Ranil Wickremesinghe and his state finance minister Shehan Semasinghe will also join the in-person live streaming.
IMF's extended arrangement
The International Monetary Fund's 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.
IMF bailout
Sri Lanka, which drew its first tranche of the USD 3 billion bailout programme, has already met an installment to pay back an Indian line of credit which the island nation obtained early last year just before announcing the debt default.
Wickremesinghe, also the island nation's finance minister, who spearheaded the IMF negotiations, specially mentioned the contributions made by Sitharaman to assist his government with the IMF for the bailout.
The IMF bailout, the 17th in Sri Lanka's history, was approved following prolonged discussions over Colombo's unsustainable debt.
Sri Lanka financial crisis
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.
With inputs from PTI
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