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IMF ready to support Sri Lanka’s discussions with bondholders

18 April 2024 01:32 pm - 4     - {{hitsCtrl.values.hits}}

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April 18 (Reuters) The International Monetary Fund (IMF) stands ready to support Sri Lanka's discussions with international bondholders and will provide a formal assessment after the parties reach a tentative agreement-in-principle, an IMF spokesperson said on Thursday.

"We hope an agreement consistent with the parameters of the IMF-supported program and official creditors' Comparability of Treatment requirements can be reached soon, ahead of completing the second review under the program," the spokesperson said.

Sri Lanka said it failed to reach an agreement with bondholders to restructure about $12 billion debt earlier this week, raising concerns there could be a delay in the island nation receiving a third tranche of its $2.9 billion IMF program in June.

The government said one of the main stumbling blocks had been that the "baseline parameters" of the bondholders' plan had not matched those embedded in its IMF program.

“We encourage both parties to continue their discussions swiftly," the IMF statement added.

Sri Lanka will consult with the IMF to assess if the latest proposals discussed with bondholders were within the parameters of its bailout program.

The island nation defaulted on its foreign debt in May 2022 and kicked off negotiations with bilateral creditors several months later, eventually securing an agreement in principle with China, India and the Paris Club last November.

Sri Lanka plunged into its worst financial crisis since independence from the British in 1948 after its foreign exchange reserves fell to record lows in early 2022, leaving it unable to pay for essentials including fuel, cooking gas, and medicine.


  Comments - 4

  • joshua Thursday, 18 April 2024 03:42 PM

    The bankruptcy created by rajapakshes still lingers

    Pws Thursday, 18 April 2024 05:05 PM

    I support bondholders stand..There is no reason for bondholders to take hair cut.Sri Lanka economy is recovering well and should pay the debt they took..Bondholders have not been paid interest since 2022..Sri lanka trying to bully bondholders why not they try bully china japan india imf worldbank why punish small bondholders ??Sri Lanka can issue new bonds to pay off the old bonds or use loans from china imf at lower interest rates pay off high interest bonds..If Sri Lanka gives hair cut to bondholders they will pay heavy price for future borrowing.The President Ranil promised Sri Lanka will pay all its debts..

    Patcitz Friday, 19 April 2024 03:00 PM

    It will be a beginning of the end for the IMF story after the Presidential election, where a new regime is going to lead the country into properity, rather than under Ranil's US slavery leading the nation into a irrevocable MESS

    Patcitz Friday, 19 April 2024 03:14 PM

    Any delay in IMF third tranche will be beneficial to form a stable government in Sri Lanka, therefore, please IMF must stop aid to Sri Lanka immediately up until a stable government is formed after election, possibly sending Ranil home.


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