Will ‘play positive role’ to help bankrupt Sri Lanka, China says

China has announced that it will “play a positive role” in helping bankrupt Sri Lanka. (representative)

Beijing:

China said on Wednesday it would “play a positive role” in helping bankrupt Sri Lanka overcome its debt crisis by agreeing to restructure its loans.

In the wake of an unprecedented economic crisis, Sri Lanka’s 22 million people are suffering from acute shortages of food, fuel and medicine, as well as prolonged power outages and skyrocketing inflation.

“China is ready to work with relevant countries and international financial institutions to play a positive role in helping Sri Lanka overcome its current difficulties, ease its debt burden and achieve sustainable development,” Foreign Ministry spokesman Mao Ning said at a regular briefing.

“The Export-Import Bank of China, as an official bilateral creditor, sent a letter of financial assurance to Sri Lanka on March 6,” he said, responding to President Ranil Wickremesinghe’s announcement on Tuesday that Beijing had agreed to help.

China, Mr. Mao added, is “supporting relevant financial institutions in actively discussing debt relief plans with the Sri Lankan side.”

President Wickremesinghe’s government worked to repair Sri Lanka’s battered finances and secure a much-needed IMF bailout.

But that was put on hold by debt negotiations with China, Sri Lanka’s biggest bilateral lender.

Beijing’s confirmation that it would help remove the final hurdle to a long-awaited International Monetary Fund bailout.

“Sri Lanka has now received financing guarantees from all major bilateral lenders,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, said on Tuesday.

(Except for the headline, this story was not edited by NDTV staff and was published from a syndicated feed.)