IMF Insists on Creditor Assurances to Unlock $2.9 Billion Sri Lanka Bailout

Bloomberg – The International Monetary Fund said its approval for a $2.9 billion loan to bail out crisis-riddled Sri Lanka will depend on the island nation securing assurances on debt relief from its bilateral creditors.

“Sri Lanka continues to engage with official bilateral creditors to obtain financing assurances and also continues to advance domestic reforms,” an IMF spokesperson said in a statement on the progress of its Extended Fund Facility to the South Asian nation.

“As soon as adequate assurances are obtained and remaining requirements are met, including by the Sri Lankan authorities, the EFF arrangement for Sri Lanka can be presented to the IMF’s Executive Board for approval.”

The Paris Club – an informal group of rich western creditors — and India have provided formal support to the multilateral lender for the loan recast, leaving China — Sri Lanka’s biggest lender — as a holdout. China, which accounts for about 52% of the bankrupt nation’s bilateral debt, has instead offered term extensions, while urging others to adopt a similar approach.

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