United States backs Sri Lanka’s debt restructuring effort

Sri Lanka


The USA will assist the restructuring of Sri Lanka’s debt and lengthen financing assurances to the crisis-hit island nation, the US Treasury Secretary Janet Yellen mentioned in a letter seen by Reuters.

Battling its manner out of the worst financial disaster in additional than seven a long time, Sri Lanka reached a preliminary deal final week with the Worldwide Financial Fund (IMF) for a mortgage of about $2.9 billion.

“The USA, as a creditor, stands able to take part in a restructuring of Sri Lanka’s debt,” Yellen mentioned in Tuesday’s letter that referred to as for all collectors to co-operate absolutely within the negotiations and restructuring.

To assist Sri Lanka’s talks with the IMF, the US Treasury will have interaction with different US authorities companies, the World Financial institution and the Asian Growth Financial institution, she added.

Earlier, the Sri Lankan authorities had mentioned america would assist the restructuring effort.

Sri Lanka’s monetary turmoil, its worst since independence from Britain in 1948, stems from financial mismanagement in addition to the COVID-19 pandemic that has worn out its key tourism business.

Sri Lankans have grappled with acute shortages of gas and different primary items for months, stoking unprecedented protests that pressured a change in authorities.

The disaster got here to a head in July when then president Gotabaya Rajapaksa, who was accused of financial mismanagement, fled the nation and resigned, to get replaced by Ranil Wickremesinghe.

The veteran lawmaker has confronted an uphill battle to stabilise the financial system, nevertheless, which has been buffeted by runaway annual inflation that stands at virtually 65% now.