Imf Offers Sri Lanka 2.9 Billion Temporary Loan To Tackle Debt Crisis Sri Lanka

The financing is meant to give breathing room to Sri Lanka, which is trying to restructure nearly $30 billion in debt owed to creditors including China, India and a host of international banks. Sri Lanka defaulted on its foreign debts for the first time in its history in May. The country is struggling with soaring inflation that recently hit 64 percent, as well as shortages of food, fuel and medicine that led to nationwide protests in the spring. These protests resulted in deadly clashes in the streets of Colombo and led to the resignation of Mahinda Rajapaksa as Prime Minister. Sri Lanka’s economy has suffered as a result of the Covid pandemic, which has caused a collapse in tourism. This caused foreign currency income to fall and debt levels to rise – a situation exacerbated by rising global commodity prices due to the war in Ukraine. The deal with the IMF still needs to be approved by the Washington-based fund’s leadership and depends on Sri Lanka following through on a series of previously agreed measures. “The staff-level agreement is only the beginning of a long road for Sri Lanka,” senior IMF official Peter Breuer told reporters in Colombo, according to Reuters. “The authorities have already started the reform process and it must continue with determination.” The Sri Lankan authorities should commit to a four-year program that will include significant tax changes, including broadening the scope of corporate income tax and VAT and making personal income taxes more progressive. The program is also intended to give more independence to Sri Lanka’s central bank, introduce new fuel and electricity tariffs, increase spending on social projects and rebuild depleted foreign exchange reserves. But the country still needs to strike deals with international banks and asset managers that hold most of the $19 billion in government bonds that are now in default. Japan has offered to lead talks with Sri Lanka’s other main creditors, including India and China, the latter of which has invested in the country as part of its Belt and Road Initiative. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Beijing’s project, often described as a 21st-century Silk Road, has allowed China to expand its international influence by investing in more than 70 countries, including Sri Lanka. It has helped countries in Asia, Africa and Eastern Europe build railways and ports linked to China, but often results in governments heavily invoking Beijing. There are growing concerns across the developing world about China’s approach to defaults, and Beijing is widely expected to seek preferential treatment in negotiations with Sri Lanka. “If creditors are not willing to provide assurances, it would deepen Sri Lanka’s crisis and undermine the ability to repay,” Breuer was quoted as saying, with the IMF official adding that it was in the interest of all creditors to cooperate.

title: “Imf Offers Sri Lanka 2.9 Billion Temporary Loan To Tackle Debt Crisis Sri Lanka Klmat” ShowToc: true date: “2022-11-23” author: “Mark Mclarney”

The financing is meant to give breathing room to Sri Lanka, which is trying to restructure nearly $30 billion in debt owed to creditors including China, India and a host of international banks. Sri Lanka defaulted on its foreign debts for the first time in its history in May. The country is struggling with soaring inflation that recently hit 64 percent, as well as shortages of food, fuel and medicine that led to nationwide protests in the spring. These protests resulted in deadly clashes in the streets of Colombo and led to the resignation of Mahinda Rajapaksa as Prime Minister. Sri Lanka’s economy has suffered as a result of the Covid pandemic, which has caused a collapse in tourism. This caused foreign currency income to fall and debt levels to rise – a situation exacerbated by rising global commodity prices due to the war in Ukraine. The deal with the IMF still needs to be approved by the Washington-based fund’s leadership and depends on Sri Lanka following through on a series of previously agreed measures. “The staff-level agreement is only the beginning of a long road for Sri Lanka,” senior IMF official Peter Breuer told reporters in Colombo, according to Reuters. “The authorities have already started the reform process and it must continue with determination.” The Sri Lankan authorities should commit to a four-year program that will include significant tax changes, including broadening the scope of corporate income tax and VAT and making personal income taxes more progressive. The program is also intended to give more independence to Sri Lanka’s central bank, introduce new fuel and electricity tariffs, increase spending on social projects and rebuild depleted foreign exchange reserves. But the country still needs to strike deals with international banks and asset managers that hold most of the $19 billion in government bonds that are now in default. Japan has offered to lead talks with Sri Lanka’s other main creditors, including India and China, the latter of which has invested in the country as part of its Belt and Road Initiative. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Beijing’s project, often described as a 21st-century Silk Road, has allowed China to expand its international influence by investing in more than 70 countries, including Sri Lanka. It has helped countries in Asia, Africa and Eastern Europe build railways and ports linked to China, but often results in governments heavily invoking Beijing. There are growing concerns across the developing world about China’s approach to defaults, and Beijing is widely expected to seek preferential treatment in negotiations with Sri Lanka. “If creditors are not willing to provide assurances, it would deepen Sri Lanka’s crisis and undermine the ability to repay,” Breuer was quoted as saying, with the IMF official adding that it was in the interest of all creditors to cooperate.

title: “Imf Offers Sri Lanka 2.9 Billion Temporary Loan To Tackle Debt Crisis Sri Lanka Klmat” ShowToc: true date: “2022-12-13” author: “Philip Kirkland”

The financing is meant to give breathing room to Sri Lanka, which is trying to restructure nearly $30 billion in debt owed to creditors including China, India and a host of international banks. Sri Lanka defaulted on its foreign debts for the first time in its history in May. The country is struggling with soaring inflation that recently hit 64 percent, as well as shortages of food, fuel and medicine that led to nationwide protests in the spring. These protests resulted in deadly clashes in the streets of Colombo and led to the resignation of Mahinda Rajapaksa as Prime Minister. Sri Lanka’s economy has suffered as a result of the Covid pandemic, which has caused a collapse in tourism. This caused foreign currency income to fall and debt levels to rise – a situation exacerbated by rising global commodity prices due to the war in Ukraine. The deal with the IMF still needs to be approved by the Washington-based fund’s leadership and depends on Sri Lanka following through on a series of previously agreed measures. “The staff-level agreement is only the beginning of a long road for Sri Lanka,” senior IMF official Peter Breuer told reporters in Colombo, according to Reuters. “The authorities have already started the reform process and it must continue with determination.” The Sri Lankan authorities should commit to a four-year program that will include significant tax changes, including broadening the scope of corporate income tax and VAT and making personal income taxes more progressive. The program is also intended to give more independence to Sri Lanka’s central bank, introduce new fuel and electricity tariffs, increase spending on social projects and rebuild depleted foreign exchange reserves. But the country still needs to strike deals with international banks and asset managers that hold most of the $19 billion in government bonds that are now in default. Japan has offered to lead talks with Sri Lanka’s other main creditors, including India and China, the latter of which has invested in the country as part of its Belt and Road Initiative. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Beijing’s project, often described as a 21st-century Silk Road, has allowed China to expand its international influence by investing in more than 70 countries, including Sri Lanka. It has helped countries in Asia, Africa and Eastern Europe build railways and ports linked to China, but often results in governments heavily invoking Beijing. There are growing concerns across the developing world about China’s approach to defaults, and Beijing is widely expected to seek preferential treatment in negotiations with Sri Lanka. “If creditors are not willing to provide assurances, it would deepen Sri Lanka’s crisis and undermine the ability to repay,” Breuer was quoted as saying, with the IMF official adding that it was in the interest of all creditors to cooperate.

title: “Imf Offers Sri Lanka 2.9 Billion Temporary Loan To Tackle Debt Crisis Sri Lanka Klmat” ShowToc: true date: “2022-11-08” author: “Mary Green”

The financing is meant to give breathing room to Sri Lanka, which is trying to restructure nearly $30 billion in debt owed to creditors including China, India and a host of international banks. Sri Lanka defaulted on its foreign debts for the first time in its history in May. The country is struggling with soaring inflation that recently hit 64 percent, as well as shortages of food, fuel and medicine that led to nationwide protests in the spring. These protests resulted in deadly clashes in the streets of Colombo and led to the resignation of Mahinda Rajapaksa as Prime Minister. Sri Lanka’s economy has suffered as a result of the Covid pandemic, which has caused a collapse in tourism. This caused foreign currency income to fall and debt levels to rise – a situation exacerbated by rising global commodity prices due to the war in Ukraine. The deal with the IMF still needs to be approved by the Washington-based fund’s leadership and depends on Sri Lanka following through on a series of previously agreed measures. “The staff-level agreement is only the beginning of a long road for Sri Lanka,” senior IMF official Peter Breuer told reporters in Colombo, according to Reuters. “The authorities have already started the reform process and it must continue with determination.” The Sri Lankan authorities should commit to a four-year program that will include significant tax changes, including broadening the scope of corporate income tax and VAT and making personal income taxes more progressive. The program is also intended to give more independence to Sri Lanka’s central bank, introduce new fuel and electricity tariffs, increase spending on social projects and rebuild depleted foreign exchange reserves. But the country still needs to strike deals with international banks and asset managers that hold most of the $19 billion in government bonds that are now in default. Japan has offered to lead talks with Sri Lanka’s other main creditors, including India and China, the latter of which has invested in the country as part of its Belt and Road Initiative. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Beijing’s project, often described as a 21st-century Silk Road, has allowed China to expand its international influence by investing in more than 70 countries, including Sri Lanka. It has helped countries in Asia, Africa and Eastern Europe build railways and ports linked to China, but often results in governments heavily invoking Beijing. There are growing concerns across the developing world about China’s approach to defaults, and Beijing is widely expected to seek preferential treatment in negotiations with Sri Lanka. “If creditors are not willing to provide assurances, it would deepen Sri Lanka’s crisis and undermine the ability to repay,” Breuer was quoted as saying, with the IMF official adding that it was in the interest of all creditors to cooperate.