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Sri Lanka seeks loan repayment moratorium in ongoing debt restructuring talks

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Sri Lanka is seeking a loan repayment moratorium for its US$ 12 billion bilateral debts until 2028 during the ongoing talks in London with bondholders on debt restructuring as the country still grapples to emerge from the economic crisis, a Finance Ministry top official divulged.

A bondholders steering committee is expected to reach an agreement or sign a memorandum of understanding considering a proposal from the government to rework the overseas debt that has been in default since 2022.

The government is asking lenders to accept a plan to defer payments for five years and then pay down the debts from the beginning of 2028 through 2042, the top official said.

China has expressed willingness to continue supporting its financial institutions to actively negotiate with Sri Lanka, maintain close communication with other creditors in the International Monetary Fund, and assist Sri Lanka in financial relief, China’s foreign ministry said in a joint bilateral statement (with Sri Lanka) on Friday.

This statement was issued following the conclusion of Prime Minister Dinesh Gunawardena’s visit to China, where he discussed finalising a debt restructuring deal on the instructions of President Ranil Wickremesinghe.

The two countries also signed nine new agreements amid Sri Lanka’s efforts to restructure and revive its economy.

Finance State Minister Shehan Semasinghe, who accompanied the Prime Minister, noted that Sri Lanka reached an agreement in principle with the EXIM Bank of China, and it could be extended further this year.

China’s Exim Bank had agreed to extend the US$4.5 billion debt servicing for two years starting in 2022 as an immediate contingency measure based on Sri Lanka’s request.

Sri Lanka’s largest bilateral debtors, China with $4.6 billion and India with $1.37 billion, are outside of the Paris Club.

India has already decided to go along with the Paris Club, but China does not want to get onto that platform.

China has given loans to several other countries in the world amounting to around $600 billion, and therefore it cannot consider Sri Lanka for preferential debt treatment, officials said.

Chinese authorities have already informed the government to resume the debt repayment from April 2024, and thereafter they can consider extending some relief.

Sri Lanka’s external debt stock stood at US$ 37.3 billion as of December 2023, bilateral debt at US$ 10.8 billion, multilateral debt at US$ 10.84 billion, and commercial loans at US$ 14.74 billion.

(Except for the headline, this story, originally published by sundaytimes.lk has not been edited by SLM staff)

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Indian HC issues statement on ‘Operation Sindoor’

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The Indian High Commission in Colombo has issued a statement on the ‘Operation Sindoor’ launched by the Indian Armed Forces targeting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir.

According to the statement, 09 sites have been targeted.

The statement further notes :

“Our actions have been focused, measured and non- escalatory in nature. No Pakistani military facilities have been targeted. India has demonstrated considerable restraint in selection of targets and method of execution.”

 “These steps come in the wake of the barbaric Pahalgam terrorist attack in which 25 Indians and one Nepali citizen were murdered. We are living up to the commitment that those responsible for this attack will be held accountable.”

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Prasanna Ranaweera remanded (Update)

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Former State Minister Prasanna Ranaweera has been remanded until May 19 by the Mahara Magistrate’s Court.

He had surrendered to the court earlier today (May 07).


(Previous news 2025 May 07 –11.00.a.m.)

Prasanna Ranaweera surrenders to court

Former State Minister Prasanna Ranaweera has surrendered to the Mahara Magistrate’s Court today (May 07).

Previously, an open warrant was issued for Ranaweera’s arrest over allegedly selling a plot of state-owned land in Kiribathgoda to a private party by forging documents.

Several persons including former Minister Mervyn Silva are currently in remand custody over the incident.

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NPP leads at CMC but fails to secure majority

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The National People’s Power (NPP) has won the most number of seats in the Colombo Municipal Council (CMC), but has not obtained enough to form a majority.
The party secured 48 seats with over 81,000 votes, which is about 36.9% of the total.

The Samagi Jana Balawegaya (SJB) came in second with 29 seats, followed by the United National Party (UNP) with 13 seats. The Sri Lanka Podujana Peramuna (SLPP) and Sri Lanka Muslim Congress (SLMC) won five and four seats respectively. Meanwhile, Independent & minor parties have secured 20 seats.

The CMC is Sri Lanka’s largest and oldest local government body.

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