Terms of Sri Lanka’s debt deal with China shared with other creditors – report

Sri Lanka’s central bank chief said the government has shared the terms of a $4.2 billion China debt deal with other creditors

Sri Lanka’s central bank chief said the government has shared the terms of a $4.2 billion China debt deal with other creditors — a key sticking point with countries like India — paving the way for more loans from the International Monetary Fund.

Governor Nandalal Weerasinghe said he hopes the official creditors committee, which is led by Japan, India and the Paris Club of nations, will now propose an agreement to restructure Sri Lanka’s debt. He expects that will allow the IMF to approve a payout of $330 million before the end of the year, he said in an interview in Colombo on Thursday.

Sri Lanka’s recent debt deal with Export-Import Bank of China caught the IMF and creditor nations like India by surprise, with some officials raising concerns about the lack of transparency over the agreement. China, which is Sri Lanka’s biggest bilateral lender, isn’t part of the official creditors committee. Weerasinghe, 62, said details of the China agreement have now been shared with the creditor committee and the IMF.  

“We hope the official creditors will also respond with their support so that we can go ahead” with the IMF’s funding program, he said. He didn’t disclose the terms of the China deal in the interview.