The International Monetary Fund (IMF) and bilateral creditors have supported Sri Lanka’s $12.5 billion bondholder debt restructure, the ministry of finance said in a statement on Friday. This is a significant boost to the island nation’s already precarious economy.
In May 2022, Sri Lanka had its first-ever international loan default, collapsing under the weight of its massive debt load and depleting foreign exchange reserves.
It said on Friday that it has received support for the $12.5 billion international bond restructuring from the IMF and its bilateral creditors, which include China, Japan, and India, after reaching a draft agreement with creditors last month.
The Official Creditors Committee formally confirmed to Sri Lanka’s Finance Ministry that the parameters of the Agreement in concept aligned with the Comparability of Treatment concept.
In a separate news, Anura Kumara Dissanayake, the recently elected president, has promised to lower taxes as part of the IMF program.
He stated that while his government agrees with the IMF program’s general guidelines, it will reexamine direct income tax and value-added tax in order to lessen the burden on the general population during a meeting with an IMF mission in Colombo.
