Sri Lanka debt deal a key milestone towards restoring debt sustainability

The International Monetary Fund (IMF) said on Thursday that Sri Lanka’s agreements with China and other creditor nations to restructure about $10 billion in bilateral debt took the island nation a step closer towards restoring debt sustainability.
Peter Breuer, IMF’s senior mission chief for Sri Lanka, said in a statement, “We hope that there will be swift progress on reaching agreements with external private creditors in the near future.”
Sri Lanka still needs to convince bondholders to restructure about $12.5 billion in international bonds, on which the global lender said it hopes to see swift progress in the near future.
Sri Lanka signed agreements with China and other creditor nations to restructure about $10 billion in bilateral debt on Wednesday.
The move brings Sri Lanka closer to finalising a debt restructuring process that began in September 2022 after its reserves hit record lows and forced the island nation to default on its foreign debt for the first time.