India’s Finance Minister, Nirmala Sitharaman, participated in a high-level meeting regarding Sri Lanka’s debt issues at the International Monetary Fund (IMF)-World Bank (WB) Spring Meetings in Washington DC on Thursday.
During the meeting, Sitharaman expressed India’s commitment towards supporting Sri Lanka in dealing with its ongoing economic crisis.
Sitharaman stressed the importance of cooperation among creditors to ensure transparency and equality in the treatment of all creditors in debt restructuring discussions.
Other attendees at the meeting included Japan Finance Minister Suzuki Shunichi, Sri Lanka State Finance Minister Shehan Semasinghe, and Emmanuel Moulin, Director General of the Treasury, France.
The official statement released after the meeting stated that Sri Lanka’s President, Ranil Wickremesinghe, participated virtually. The purpose of the event was to demonstrate multilateral cooperation among creditors and Sri Lanka in the debt restructuring process.
During the meeting, the ministers announced the launch of the debt restructuring negotiation process in Sri Lanka under the leadership of three co-chairs: India, Japan, and France. This coordinated effort aims to restructure Sri Lanka’s debt with both bilateral and sovereign bondholders.
Sri Lanka faced an unprecedented financial crisis in 2022, which was the worst since its independence from Britain in 1948. The crisis led to political turmoil in the country, resulting in the ouster of the Rajapaksa family. In September 2022, the IMF approved a USD 2.9 billion bailout package for Sri Lanka over four years, pending Sri Lanka’s ability to restructure its debt with creditors. With assurances from creditors, the USD 2.9 billion facilities could get the IMF board approval in March.
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