Sri Lanka sealed the debt restructuring deal of USD 5.8 billion with the Official Creditors Committee (OCC) on Wednesday, in a major step towards its recovery from the 2022 financial crisis.
Thank you for reading this post, don't forget to subscribe!OCC, the group of creditor nations, including India, was launched on April 13, 2023, to hold talks among Sri Lanka’s bilateral creditors to finalise a plan for restructuring Sri Lanka’s debt, following the IMF’s approval for the Extended Fund Facility (EFF Programme) for Sri Lanka on March 20, 2023.
“After several rounds of engagements, the OCC signed the Memorandum of Understanding (MoU) on debt restructuring on 26 June 2024. This milestone demonstrates the strong progress made by Sri Lanka in stabilizing its economy and moving towards reform and growth,” the Ministry of External Affairs said in a press release.
As one of the co-chairs of the OCC, along with France and Japan, India has been steadfast in its commitment to the stabilisation, recovery and growth of the Sri Lankan economy.
This was also demonstrated by India’s unprecedented financial support of USD 4 billion to Sri Lanka. India was also the first creditor nation to convey financing assurances to IMF which paved the way for Sri Lanka to secure the IMF programme.
“India will continue to support Sri Lanka’s economic recovery, including by promoting long-term investments in its key economic sectors,” the statement added.
Sri Lankan President Ranil Wickremesinghe said that international confidence in the country is reaffirmed as bilateral creditors have reached an agreement serving as a kind of international endorsement, Sri Lanka-based Daily Mirror reported. He also expressed gratitude to the lending nations, including India.
“The journey to this point has not been easy. We have traveled a difficult and arduous path. Our ministers and officials have worked tirelessly towards this goal. The majority of our citizens have supported us with patience and resilience, enduring various hardships. Despite the ongoing challenges, we have persevered,” he said in his televised address on Wednesday.
“I extend my gratitude to our creditors, including China and Exim Bank of China, India, Japan, and France, who co-chair the Official Creditors Committee. I also thank the other members of the committee and the Paris Club Secretariat for their support in making these negotiations successful,” Wickremesinghe added.
Sri Lanka defaulted on its foreign debt in April 2022 after running out of foreign exchange and the worst economic crisis forced then-president Gotabaya Rajapaksa to step down.-ANI