Now that Zambia’s Creditor Committee reached a landmark debt restructuring deal with its bilateral lenders, there’s new optimism that the same will happen in Sri Lanka.
The South Asian island state is facing a full-scale economic collapse brought on in part by excessive borrowing including billions of dollars of loans from China. Earlier, Colombo was ineligible to join the G20’s Common Framework that Zambia used to restructure its debts because it was seen as too wealthy. Now, as the crisis is depleting its foreign reserves, that may no longer be the case.
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