Sri Lanka now has initiated the talk with China on the subject of refinancing its debt, says a spokesman in the cabinet as Colombo is facing a hard time due to the lack of financial stability for the decades now.
China has made it clear to Colombo that it would appreciate the refinancing of debt, as stated by Nalaka Godahewa (Media Minister of Sri Lanka)
“As one can see, the IMF is interested to associate with Sri Lanka and the other countries are very much aware of the fact that we are backed up with support. Long before now, we have already received a word from World Bank and other renowned agencies for the support from their end,” says Gohahewa, also the discussions were made with Beijing during the early phase itself.
CHINA AND SRI LANKA START THE TALK ON REFINANCING DEBT:
Ali Sabry, who is Finance Minister in Sri Lanka went to Washington to have a discussion with IMF, India, The World Bank, and others for the aid in financial matters which resulted in the suspension of payments on parts of its external debt of about $51 billion.
Sri Lankan economy has been severely suffering due to the ongoing pandemic and the tax cuts imposed by the populist government which led to the deterioration in the reserves of foreign currency, lack of fuel, medicinal drugs, and food which brought thousands of civilians onto the streets with aggressive protesting rage.
About $3.5 billion of loans from China to Sri Lanka have curated the joint-largest bilateral creditor.
Gotabaya Rajapaksa who is the President also asked China to assist in restructuring debt repayments just the time when he had a meeting with the Foreign Minister of China, Wang Yi in the month January.