Finance State Minister Shehan Semasinghe yesterday that the Debt Restructuring committee co-chaired by Japan, India and France, has confirmed the policy agreement on the financial assurances in restructuring Sri Lanka’s debt, in accordance with the debt restructuring standards which are outlined by the International Monetary Fund.
Semasinghe said the agreement of all the official creditors of Sri Lanka in restructuring debt is a very important milestone and it is also a major step in overcoming the economic crisis in Sri Lanka.
He added that the approval of the Official Debt Restructuring Committee will enable the approval of the Executive Board to release the second installment after the completion of the first review of the International Monetary Fund programme in December.
This will enable other partners such as the World Bank and the Asian Development Bank to provide further financial assistance. Semasinghe is of the view that this step is an important juncture that shows the continued cooperation of the International community for Sri Lanka’s economic recovery and that Sri Lanka is committed in implementing the comprehensive reform program needed to restore macroeconomic stability and achieve sustainable economic growth.
He further stated that Sri Lanka, with its financial consultants, will continue to work with external private creditors to further a similar agreement. Earlier, China Exim Bank has agreed to restructure the Sri Lanka’s debt.
Meanwhile, the Club de Paris (Paris Club) in a statement confirmed that Official Creditor Committee co-chaired by India, Japan and France agreed on the main parameters of a debt treatment consistent with those of the Extended Fund Facility (EFF) arrangements between Sri Lanka and the IMF.
“This agreement will allow the IMF staff to present to the IMF Executive Board the first review of Sri Lanka’s EFF arrangement and open the way for approval of the second disbursement under the arrangement.The OCC commends the Sri Lankan authorities for their continuous efforts in implementing the reforms necessary for their country’s return to a sustainable path”.
The Statement said that the OCC stands ready and looks forward to formalizing this agreement in the coming weeks in a Memorandum of Understanding with the Sri Lankan authorities.
“The OCC expects other bilateral creditors to consent to sharing, in a transparent manner, the information necessary for the OCC to evaluate comparability of treatment regarding their own bilateral agreement. The OCC also expects that the Sri Lankan authorities will continue to engage with their private creditors to find as soon as possible an agreement on terms at least as favourable as the terms offered by the OCC,” the statement said.
