IMF Tells Sri Lanka to Gets Its Creditors in Line, Prompting Showdown With China

OLIVIER DOULIERY / AFP

The Sri Lankan government suffered another setback in its ongoing effort to secure a $2.9 billion emergency financing package from the International Monetary Fund after the lender informed Colombo it would have to secure more assurances from its creditors, namely China, to provide debt relief.

The Finance Ministry in Colombo had hoped that sweeping debt relief assurances from India and Paris Club lenders, including Japan, along with a much less generous debt repayment suspension offer from the China Exim Bank would be sufficient to persuade the IMF to move forward with the Extended Fund Facility (EFF).

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by Eric Olander

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