Sri Lanka's debt restructuring plan could be completed by June: Officials

livemint.com:

New Delhi: The plan to restructure Sri Lanka’s debt could be completed by June, two people aware of the matter said, as the island-nation prepared to reach an agreement with its creditors in the coming months. "We expect that the agreements will be finalized around June, which will help settle the debt restructuring process with Sri Lanka," said one of the officials mentioned above, requesting anonymity. In May 2022, India's southern neighbour defaulted on its overseas debt after its worst financial crisis since independence in 1948 emptied out foreign exchange reserves.

In March 2023, Sri Lanka secured a four-year $2.9 billion bailout package from the International Monetary Fund (IMF), subject to the country ensuring debt sustainability in line with agreed targets. Sri Lanka has also negotiated a preliminary deal to restructure about $10 billion of debt owed to bilateral creditors led by India, Japan and France. Last October, Sri Lanka and China reached a deal to restructure $4.2 billion in debt.

Last November, it reached an agreement with lenders, including China, to restructure nearly $5.9 billion in loans in order to continue accessing a $3 billion IMF bailout package. The deal included a mix of extending the tenure and reducing interest on bilateral loans granted to the cash-strapped nation. India, Japan and France co-chair the island nation's official creditor committee.

However, China, despite being Sri Lanka's largest bilateral creditor, is an observer on the committee. Sri Lanka's total external debt was estimated at $36.6 billion, which includes $10.94 billion of bilateral debt, at the end of September 2023, according to Reuters. "There is a willingness to resolve this at the earliest among the creditors and