Colombo: Sri Lankathe president of Gotabaya Rajapakse His office said in a statement on Sunday that China asked the South Asian country to help restructure debt repayments as part of its efforts to help the deteriorating financial crisis.
Rajapaksa made this request during a meeting with the Chinese Foreign Minister wang yi Sunday in Colombo.
According to analysts, Sri Lanka has benefited from billions of dollars in soft loans from China, but the island nation is currently in the midst of a foreign exchange crisis, which puts it on the verge of default.
Rajapaksa’s office said, “The President said that it would be a great relief for the country if the restructuring of loan repayments could be addressed as a solution to the economic crisis caused by the COVID-19 pandemic.” Statement.
China is Sri Lanka’s fourth largest lender to international financial markets, after the Asian Development Bank (ADB) and Japan.
Over the past decade, China has given Sri Lanka more than $5 billion in loans for highways, ports, an airport and a coal power plant. But critics allege the money was used for low-return white elephant projects, which China has denied.
Rajapaksa also requested China to provide “concessional conditions” for its exports to Sri Lanka, which amounted to about $3.5 billion in 2020, the statement said, but did not give further details. Rajapaksa also proposed allowing Chinese tourists to return to Sri Lanka, provided they adhere to strict COVID restrictions, which include staying only in pre-approved hotels and visiting only certain tourist attractions.
China was Sri Lanka’s main source of tourists before the pandemic, and the island imports more goods from China than any other country.
Sri Lanka is an important part of China’s Belt and Road Initiative (BRI), a long-term plan to connect China to the rest of the world, but has been dubbed a “debt trap” by others, including the United States. small nations.
Sri Lanka is to repay about $4.5 billion in debt this year, starting with $500 million in international sovereign bonds.be it) is maturing on January 18.
The $1.5 billion yuan swap from China helped the island increase its reserves to $3.1 billion at the end of December.
A source in Sri Lanka’s finance ministry told Reuters that debt repayments to China in 2022 are likely to fall short of ISB commitments of $1.54 billion, about $400 million-$500 million.
Sri Lanka’s central bank has repeatedly assured that all loan repayments will be met and that funds for the January ISB have already been allocated.
Rajapaksa made this request during a meeting with the Chinese Foreign Minister wang yi Sunday in Colombo.
According to analysts, Sri Lanka has benefited from billions of dollars in soft loans from China, but the island nation is currently in the midst of a foreign exchange crisis, which puts it on the verge of default.
Rajapaksa’s office said, “The President said that it would be a great relief for the country if the restructuring of loan repayments could be addressed as a solution to the economic crisis caused by the COVID-19 pandemic.” Statement.
China is Sri Lanka’s fourth largest lender to international financial markets, after the Asian Development Bank (ADB) and Japan.
Over the past decade, China has given Sri Lanka more than $5 billion in loans for highways, ports, an airport and a coal power plant. But critics allege the money was used for low-return white elephant projects, which China has denied.
Rajapaksa also requested China to provide “concessional conditions” for its exports to Sri Lanka, which amounted to about $3.5 billion in 2020, the statement said, but did not give further details. Rajapaksa also proposed allowing Chinese tourists to return to Sri Lanka, provided they adhere to strict COVID restrictions, which include staying only in pre-approved hotels and visiting only certain tourist attractions.
China was Sri Lanka’s main source of tourists before the pandemic, and the island imports more goods from China than any other country.
Sri Lanka is an important part of China’s Belt and Road Initiative (BRI), a long-term plan to connect China to the rest of the world, but has been dubbed a “debt trap” by others, including the United States. small nations.
Sri Lanka is to repay about $4.5 billion in debt this year, starting with $500 million in international sovereign bonds.be it) is maturing on January 18.
The $1.5 billion yuan swap from China helped the island increase its reserves to $3.1 billion at the end of December.
A source in Sri Lanka’s finance ministry told Reuters that debt repayments to China in 2022 are likely to fall short of ISB commitments of $1.54 billion, about $400 million-$500 million.
Sri Lanka’s central bank has repeatedly assured that all loan repayments will be met and that funds for the January ISB have already been allocated.
,