SL’s debt restructuring journey to go smoother with China affirming cooperation

• Says willing to collaborate with relevant countries and international financial institutions
• Affirms commitment to reducing SL’s debt burden with a strong focus on promoting sustainable development in the nation

Sri Lanka’s debt restructuring process is expected to progress more smoothly as China has affirmed its commitment to collaborating with other creditors to assist the island nation in navigating its ongoing debt crisis.
On Friday, China revealed its position in the debt restructuring effort, stating its government “willing to work” with relevant countries and international financial institutions to keep playing a positive role in helping Sri Lanka address its current difficulties”.

China expressed its stance in this regard in a joint statement released with the Sri Lankan government.
China went on to point out that it will alleviate the debt burden and help the island nation restore sustainable development. China’s support to Sri Lanka to ease financial difficulties was well received and commended by the government.

The joint statement noted that China has provided a financing support document to Sri Lanka in a timely manner and helped Sri Lanka obtain loans from the International Monetary Fund in March 2023. 
In late September, as an official creditor, the Export-Import Bank of China reached a preliminary agreement with Sri Lanka on debt treatment. 
Earlier in July, the IMF called on Sri Lanka to “proactively” engage with China on debt restructuring as it is a “big creditor”, alongside India and Japan.
China remainw Sri Lanka’s largest bilateral creditor. Sri Lanka owes China about US$ 6.5 billion which includes development bank loans and a central bank swap.