Jan 24, Colombo: China has offered debt service relief in 2022, 2023 but Sri Lanka sources are unclear if China letter will be enough for the International Monetary Fund Reuters reported.
The Export-Import Bank of China has offered Sri Lanka a two-year moratorium on its debt and said it will support the country’s efforts to secure a $2.9 billion loan from the International Monetary Fund, according to a letter reviewed by Reuters.
Regional rivals China and India are the biggest bilateral lenders to Sri Lanka, a country of 22 million people that is facing its worst economic crisis in seven decades.
India wrote to the IMF earlier this month, saying it would commit to supporting Sri Lanka with financing and debt relief, but the island nation also needs the backing of China in order to reach a final agreement with the global lender.
However, China’s Jan. 19 letter, sent to the finance ministry, may not be enough for Sri Lanka to immediately gain the IMF’s approval for the critical loan, a Sri Lankan source with knowledge of the matter said.