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Sri Lanka’s debt repayments to be suspended until 2028

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Sri Lanka and a group of its creditors are in final negotiations to suspend debt repayments until 2028, Nikkei has learned, as country creditors including Japan seek to prevent China’s influence from expanding in the debt-ridden island.

“Negotiations [with the creditor nations] have concluded. We are hoping that it [a detailed announcement] will take place in the next few weeks,” Sagala Ratnayaka, Sri Lanka’s national security adviser to the president, told Nikkei in a recent interview. The repayment period will be 15 years, from 2028 to 2042, with the interest rate newly set at around 2%. He said that there will be no further debt reduction, despite a request by the island nation.

Sri Lanka in April 2022 announced a temporary suspension of public external debt payments, in effect putting the country into default. A meeting of creditor nations was set up in April 2023. Japan, which is the largest creditor country after China, is serving as the chair in the talks along with India and France.

Sri Lanka and the creditor nations have reached a basic agreement on a repayment moratorium and a reduction in interest. The provision of financial assistance from the International Monetary Fund, which was conditional on debt restructuring agreements being struck with major creditor countries, has also begun.

China, the biggest creditor, has only joined the meeting as an observer. However, the restructuring of debt from China via loans of the Export-Import Bank of China would be “similar,” Ratnayaka said. “We have a saying which means ‘everyone will be treated equally’,” implying that the terms of debt repayment to China would be similar to those agreed at the creditors’ meeting.

As of the end of 2023, Sri Lanka’s outstanding debt was $37.3 billion, of which China accounted for $4.7 billion.

Sri Lanka handed over control of its southern Hambantota Port to China in 2017. This was seen as a typical example of a “debt trap,” where infrastructure rights are taken away amid delayed debt repayments. Some creditors, including Japan and India, are wary of China expanding its influence into the Indo-Pacific, with Sri Lanka as its base.

Ratnayaka explained that “this is all purely commercial. There is nothing military [about the port agreement]. Sri Lanka is open to investment and we don’t pick and choose on the basis of what country, unless it affects national security.” He added, “But in the north and areas which would affect the security of India, we are conscious.”

(This story, originally published by asia.nikkei.com has not been edited by SLM staff)

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Keeri Samba shortage : 40,000MT of rice to be imported

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The government has recommended to import 40,000 MT of substitute rice to address the shortage of Keeri Samba in the local market.

Following the notification by the Consumer Affairs Authority that sufficient stocks of Keeri Samba are not available, the Food Security and Cost of Living Committee, which met at the Presidential Secretariat yesterday (June 25) made the above recommendation.

Accordingly, around 5,000 MT of rice will be imported through state institutions while the remaining will be imported by the private sector, the PMD said.

A decision was also made to continue purchasing Keeri Samba paddy at a price of Rs. 120 per kilogram through the Paddy Marketing Board and Sathosa in order to safeguard local farmers.

Discussions were also held regarding the provision of storage facilities for Corn required for Thriposha production and the importation of rice or broken rice or else alternative raw materials for beer and animal feed production.

Attention was drawn during the discussions to the production of corn based on consumer demand, as well as the production of canned fish, eggs and meat and importation of salt.

Fertiliser importation, stock maintenance, supply and distribution were also discussed. The progress of fertiliser distribution for the Yala season, the progress of issuing “Odapana” loans and the overall success of cultivation activities during the Yala season were reviewed as well.

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Indictments filed against Rambukwella family over 43 charges

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The Commission to investigate allegations of Bribery or Corruption (CIABOC) has filed indictments under 43 charges against  former Media, Health and Environment Minister – Keheliya Rambukwella and five other members of his family.

The indictments have been filed against the following accused, the first accused Keheliya Bandara Rambukwella, the second accused Priyadarshani Epa, the third accused Chamithri Jananika Rambukwella, the fourth accused Ramalee Rambukwella, the fifth accused Amali Rambukwella and the sixth accused – Isuru Bandara Polgasdeniya.

They were previously arrested over an investigation conducted under the Prevention of Money Laundering Act and were subsequently released on bail by the Colombo Magistrate’s Court.

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Annual bus fare revision to be announced after fuel price revision

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The National Transport Commission (NTC) has said that the annual bus fare revision will be announced after considering the fuel price revision scheduled for July 01.

Yesterday, transport authorities decided to reduce bus fares by 2.5% with effect from July 01.

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