Sri Lanka to save $5bn from bilateral debt deal
The Peninsula
Colombo: Sri Lanka will save $5 billion following the restructuring of its bilateral debt, much of which is owed to China, through slashed interest ra...
Colombo: Sri Lanka will save $5 billion following the restructuring of its bilateral debt, much of which is owed to China, through slashed interest rates and longer repayment schedules, the president said Tuesday.
The island nation defaulted on its foreign borrowings in 2022 during an unprecedented economic crisis that precipitated months of food, fuel and medicine shortages.
President Ranil Wickremesinghe said a deal struck last week had secured a moratorium on debt payments until 2028, extending the tenure of loans by eight years and cutting interest rates to an average of 2.1 percent.
Wickremesinghe said bilateral lenders led by China, the government's largest single creditor, did not agree to a reduction on their loans but the terms agreed would nonetheless help Sri Lanka.
"With the restructure measures we have agreed, we will make a saving of $5.0 billion," Wickremesinghe told parliament in his first address to the legislature since the debt deal.