US Treasury Secretary speaks to Ranil on IMF deal
US Secretary of the Treasury Janet L. Yellen spoke with President Ranil Wickremesinghe on the ongoing discussions with the International Monetary Fund (IMF).
During their meeting, Secretary Yellen expressed support for Sri Lanka’s steps towards an IMF-supported program to advance economic reform and achieve a strong and durable recovery, the US Department of Treasury said.
The Secretary welcomed Sri Lanka’s commitments to transparency and comparable treatment for all bilateral official and private creditors.
The IMF is said to be considering approving Sri Lanka’s bailout even without the formal assurance of debt-restructuring support from China.
Under a rarely used policy on lending into official arrears, the IMF may consider approving Sri Lanka’s loan because China’s assurance is the only prerequisite missing, according to the people who declined to be identified because the information isn’t public.
This provision is aimed at preventing a creditor from blocking assistance to a country in dire need of financing and has shown commitment to meet loan conditions.
The Paris Club — an informal group of rich, mostly western creditors — and India have provided formal support to Sri Lanka’s loan recast, leaving China as a holdout.
China, which accounts for about 52% of the bankrupt nation’s bilateral debt, has instead offered term extensions via the state-owned Export-Import Bank. (Colombo Gazette)
