IMF welcomes agreement reached between SL and OCC on debt treatment

The International Monetary Fund (IMF) has welcomed the agreement-in principle between the Sri Lankan authorities and their official creditors represented by the Official Creditor Committee on a debt treatment, consistent with the objectives of the IMF-supported programme.

This agreement-in-principle follows the earlier announcement of an agreement-in-principle between the Export-Import Bank of China and Sri Lanka.

These understandings pave the way for the IMF Executive Board to consider completion of the first review of Sri Lanka’s four-year Extended Fund Facility Arrangement Peter Breuer, IMF’s mission chief for Sri Lanka, disclosed in a statement sent via email in response to Times Online questions sent to the IMF on Wednesday.

These understandings pave the way for the IMF Executive Board to consider completion of the first review of Sri Lanka’s four-year Extended Fund Facility Arrangement, he said.  

The Government has announced 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$ 5.9 billion of outstanding public debt and consists in a mix of long-term maturity extension and a reduction in interest rates.

The agreement will facilitate a swift approval by the IMF Executive Board of the First Review of Sri Lanka’s IMF-supported programme, 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. (Bandula)