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SL to secure likely 6-yr. moratorium on debt owed to India, Paris Club

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Sri Lanka is close to finalising a debt treatment plan with India and the Paris Club, sources familiar with the negotiations said, pointing to a likely moratorium of upto six years and a reduced interest rate during the repayment period.

“The discussions are at an advanced stage. A formal agreement on the terms can be expected very soon,” the Colombo-based source told The Hindu on Thursday, after a recent discussion among members of the Official Creditor Committee [OCC].

As many as 17 countries that have extended loans to Sri Lanka formed the Committee last year for ease of debt restructuring negotiations. China opted to stay out of the platform, but has been attending its meetings as an observer. Meanwhile, Colombo has repeatedly assured the OCC that it would negotiate repayment of Chinese loans on comparable terms.

Finalising agreements with the official creditors and reaching “in principle” agreements with the key private creditors would be “critical next steps” in Sri Lanka’s economic recovery plan, the International Monetary Fund (IMF) on Thursday. After defaulting on its nearly $ 50 billion external debt in April 2022, Sri Lanka has been engaging with its diverse lenders to work out a debt treatment plan that is compatible with its pace of recovery. While Colombo is said to have made considerable progress in negotiating a deal with its bilateral creditors, private creditors holding the largest chunk of Sri Lanka’s foreign debt continue to pose a challenge.

Meanwhile, Sri Lanka got a step closer to receiving the next instalment of the International Monetary Fund’s (IMF) assistance, as part of the $3 billion package it obtained last year, to recover from the unprecedented financial crash witnessed in the island nation in 2022. Authorities reached a staff-level agreement with the Fund on the second review of its four-year Extended Fund Facility (EFF) arrangement. Upon completion of the IMF Executive Board’s review, Sri Lanka would have access to about US$337 million, taking IMF assistance it has received so far to $1 billion, the Fund said in a statement.

Commending Sri Lankan authorities for “making good progress” in implementing an “ambitious” reform agenda, IMF officials told a media gathering in Colombo that the government had shown “commendable outcomes”, in curtailing inflation, ensuring reserve accumulation, and strengthening public finances.

(The Hindu)

(Except for the headline, this story, originally published by ‘The Hindu’, has not been edited by SLM staff)

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Sri Lanka Mirror wishes everyone a happy Sinhala and Tamil New Year!

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The 2024 Sinhala and Tamil New Year dawned at 09.05 pm last night (April 13).

‘Sri Lanka Mirror’ extends heartfelt New Year greetings to all our readers. May this upcoming year be filled with boundless happiness, prosperity, and success for each and everyone of you.

–  Sri Lanka Mirror team

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Derailed train causes delays on coastal line

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A train has derailed at the Kalutara South railway station on Saturday morning (13).

Trains operating on the Coastal Line are thus experiencing delays, Sri Lanka Railways said.

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Kristalina Georgieva to head IMF for a 2nd term

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The Executive Board of the International Monetary Fund (IMF) has selected Kristalina Georgieva to serve as IMF Managing Director for a second five-year term starting on October 1, 2024.

The appointment comes ahead of the start of the fund’s spring meetings in Washington next week.

Georgieva, who has been in the role since the autumn of 2019, was the sole candidate for the position. However, it was only after European leaders signalled that they would endorse her last month that her candidacy was assured.

In a statement, the coordinators of the Executive Board, Mr. Afonso S. Bevilaqua and Mr. Abdullah F. BinZarah has said, “Looking ahead, the Board welcomes Ms. Georgieva’s ongoing emphasis on issues of macroeconomic and financial stability, while also ensuring that the Fund continues to adapt and evolve to meet the needs of its entire membership. It recognizes her focus on strengthening the Fund’s support to its members through effective policy advice, capacity development and financing. The Board looks forward to continuing to work closely with the Managing Director.”

“I am deeply grateful for the trust and support of the Fund’s Executive Board, representing our 190 members, and honored to continue to lead the IMF as Managing Director for a second five-year term,” Ms. Georgieva has said.

The Bulgarian national has served as Managing Director since October 1, 2019. The Managing Director is the chief of the IMF’s operating staff and Chair of the Executive Board. The Managing Director is assisted by four Deputy Managing Directors in overseeing the Fund’s operations, which serve its membership through about 3,100 staff.

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