China restructured Sri Lanka’s debt
2023.01.26 00:50
China restructured Sri Lanka’s debt
By Ray Johnson
Budrigannews.com – China’s foreign ministry said on Thursday that China’s Export-Import Bank of China (EXIM) has extended Sri Lanka’s debt. EXIM offered Sri Lanka a two-year moratorium on its debt and stated that it would support the nation’s efforts to secure a $2.9 billion loan from the International Monetary Fund.
China and India, rivals in the region, are Sri Lanka’s largest bilateral lenders. With 22 million people, Sri Lanka is experiencing its worst economic crisis in seven decades.
The foreign ministry stated:
“China feels for Sri Lanka as it faces difficulties and challenges and has been helping with Sri Lanka’s socio-economic development as best as we can.”
In a letter to the International Monetary Fund (IMF) earlier this month, India stated that it would support Sri Lanka with financing and debt relief. However, the island nation also requires the support of China to reach a final agreement with the global lender.
An IMF report released in March of last year stated that China EXIM loaned Sri Lanka $2.83 billion by the end of 2020, or 3.5% of the island’s debt.
Beijing has given EXIM the responsibility of lending to global governments and key industries.
According to a study conducted by the Boston University Global Development Policy Center, Beijing’s curtailment of funding for large-scale oil projects led to commitments made by EXIM and the China Development Bank (CDB), the country’s two main policy lenders, to 100 developing nations falling to a 13-year low of $3.7 billion in 2021.
