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Sri Lanka thanks India for backing $2.9 bn bailout package, issuing guarantees to IMF

Debt-ridden Sri Lanka on Wednesday thanked India for issuing the necessary guarantees sought by the IMF that would help Colombo to unlock the $2.9 billion bailout package.

India’s ministry of finance recently issued a letter to the International Monetary Fund (IMF) to confirm its support to Sri Lanka on the issue of debt restructuring.

Also, External Affairs Minister S Jaishankar during his recent visit to Colombo gave the required assurances to Sri Lanka’s top leadership for the much-needed IMF bailout package, becoming the first major lender to publicly back the island nation’s efforts to recover from its worst-ever economic crisis.

In a statement on Wednesday, the Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe thanked India for issuing the necessary guarantees warranted by the IMF for unlocking the $2.9 billion bailout for the country.

“India has clearly given financial assurances which are acceptable to the IMF ..which has all the necessary assurances ..first of all we should thank the Indian authorities for issuing that letter,” Weerasinghe said.

Sri Lanka, which is trying to secure a $2.9 billion bridge loan from the IMF, was negotiating to get financial assurances from its major creditors - China, Japan and India - which is the requisite for Colombo to get the bailout package.

The IMF bailout has been put on hold as Sri Lanka pursues talks with creditors to meet the global lender’s conditions for it. The Washington-based global lender has asked Sri Lanka to restructure its debt by negotiating with the

creditors.

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