US To Support Sri Lanka's Debt Restructuring

Yellen has welcomed his proposal for a Coordination Platform for Sri Lanka’s official bilateral creditors, the US Treasury has urged engagement in the process

| 8 Sep 2022 7:58 AM GMT

COLOMBO: The US has come forward to help restructuring of Sri Lanka's debt, President Ranil Wickremesinghe's office announced on Wednesday.

"Secretary of the Treasury, Janet Yellen, has informed that the US as a creditor country, will participate in restructuring Sri Lanka's debt. The critical need for full cooperation of all official creditors in debt negotiations and restructuring through timely participation and equal burden sharing have been outlined," the President's Office said in a statement.

In a communication addressed to Wickremesinghe, Yellen has welcomed his proposal for a Coordination Platform for Sri Lanka's official bilateral creditors, the US Treasury has urged engagement in the process.

President Wickremesinghe's Office also said that sharing the common goal with Sri Lanka of expediting financing assurances, the US has expressed readiness to join other Paris Club members in this process, in keeping with its principles. Further the US Treasury has pledged to continue to engage with their other government agencies, as well as the World Bank and Asian Development Bank, to assist the people of Sri Lanka, it stated.

The US has supported Sri Lanka by providing school nutrition for children, food vouchers for pregnant women and new mothers, and fertiliser and cash transfers for small and medium scale farmers to increase food production.

The US Department of Treasury has welcomed the Sri Lankan government's decision, to seek International Monetary Fund (IMF) assistance through an Extended Fund Facility (EFF), and thereby the recently concluded staff level agreement.

Going through its worst-ever financial crisis, Sri Lanka last week sealed a $2.9 billion loan deal with the IMF aiming the restoration of economic stability. Promised to be provided within four years, the loan is to be given as IMF's EFF that would help countries deal with balance of payments problems. However Sri Lanka has to follow strict conditions including increasing taxes and ensure strong anti-corruption procedures. (IANS)