Sri lanka News – Members of the Paris Club of mainly Western creditor said they are ready to talk with Sri Lanka on re-structuring debt after the country concluded a staff level agreement with the International Monetary Fund.
“We note the IMF’s assessment for the need for a debt treatment in the context of the IMF program,” the organization’s secretariat said in a statement.
“The Paris Club is ready to start the debt treatment process and reiterates its willingness to coordinate with non-Paris Club official bilateral creditors to provide the necessary financing assurances in a timely manner and ensure fair burden sharing, as already proposed to the largest other official bilateral creditors.
“The Paris Club remains at the disposal of Sri Lankan authorities and non-Paris Club official bilateral creditors to further discuss the next steps of the debt treatment process.”
Sri Lanka’s bi-lateral creditors include China and India who are not full members of the grouping.
Sri Lanka defaulted on its debt in April 2012 after its foreign debt started to climb and growth slowed after the end of a war due to increased monetary instability coming from lower interest rates maintained under flexible inflation targeting which triggered three currency crises over seven years.