Sri Lanka to announce debt restructuring strategy in April

Reuters

Colombo, Sri Lanka

Combination of these AFP and Reuters file photos shows a flag of Sri Lanka and a logo of International Monetary FundProthom Alo illustration

Sri Lanka aims to announce a debt-restructuring strategy in April and step up talks with commercial creditors ahead of a International Monetary Fund review of a bailout package in six months, the country's central bank governor told Reuters on Thursday.

The crisis-hit island has secured financing assurances from all its major bilateral creditors, including India and China, and so had set the stage for the IMF to give its final approval for a $2.9 billion, four-year bailout package on 20 March, the multilateral lender said on Tuesday.

The bailout is the culmination of months of negotiations as Sri Lanka looks to emerge from its worst economic crisis in more than seven decades.

"When you see the staff level agreement published - that will contain our commitment to debt restructuring and that will also reveal medium-term debt targets for us to restore debt sustainability on a long-term basis," central bank Governor P Nandalal Weerasinghe said.

"So somewhere in April we will announce ... how we are going to meet those medium-to-long-term (debt) targets. That is the next step".

Weerasinghe said the country would expedite negotiations with commercial creditors and announce the debt restructuring strategy in consultation with them, before finalising the debt restructuring terms.

"We are trying to finalise this in about the next six months' time, so before the next (IMF) review will be completed," he said.