‘Daily Mirror’ online recently quoted a Chinese embassy official as saying that Sri Lanka had not responded to an intimation by Beijing to the Finance Ministry three months ago that it was willing to discuss the island’s debts to China’s banks.

China is yet to announce an agreement to restructure these debts.

In 2022 alone, Sri Lanka has to pay back between 1.5 and two billion US dollars, out of total foreign debt repayments for the year of around seven B USD to Japan, India, IMF, ADB, World Bank and other bilateral and multilateral lenders.

In total, the island owes around eight B USD to China.

Recent months saw India offering goods and financial support amounting to around four B USD.

Up to 2026, Sri Lanka has to repay 25 B USD of borrowings, in addition to a payment for international sovereign bonds worth around 14 B USD.

A visiting IMF team is currently holding talks with the government on a credit facility, before which Sri Lanka is required to restructure its debts.

The government expects Japan’s mediation to negotiate the debts with China and other bilateral lenders.

 

(Ajith Parakum Jayasinghe)