ECONOMYNEXT – Sri Lanka is looking forward to the quick implementation of the terms of a debt restructuring deal with the official creditor committee led by the Paris Club and India, the Finance Ministry said.
“This agreement marks a landmark step for Sri Lanka. We extend our sincerest thanks to the OCC and its co-chairs, Japan and France, for the unwavering support in resolving our country’s public debt situation,” Treasury Secretary Mahinda Siriwardana said in a statement.
“This agreement serves a key milestone in Sri Lanka’s ongoing endeavour to achieve public debt sustainability and to foster economic recovery.”
The full statement is reproduced below:
SRI LANKA REACHES AGREEMENT WITH THE OFFICIAL CREDITOR COMMITTEE ON DEBT TREATMENT
The Government of the Democratic Socialist Republic of Sri Lanka is pleased to announce that it has reached agreement in principle with its Official Creditor Committee (OCC) on the financial terms of a debt treatment. The agreement in principle covers approximately US$ 5.9bn of outstanding public debt and consists in a mix of long-term maturity extension and a reduction in interest rates.
The Sri Lankan Government commends the support and cooperation of OCC members in reaching this agreement, which demonstrates a mutual commitment to restoring public debt sustainability in line with the International Monetary fiend (IMF) program targets. The agreement will facilitate a swift approval by the IMF Executive Board of the First Review of Sri Lanka’s IMF-supported program, allowing for the next tranche of IMF financing of about US$ 334 million to be disbursed.
The agreed-upon debt treatment terns will be further detailed and finalized in a Memorandum of Understanding between Sri Lanka and the OCC, which will then be implemented through bilateral agreements with each OCC member, in accordance with their laws and regulations. The Sri Lankan Government looks forward to a prompt implementation of the agreed terms.