Sri Lanka has completed a restructuring of $5.8bn of debt owed to a group of creditor nations, marking a significant step in the cash-strapped south Asian nation’s efforts to exit a two-year-old default.
The finalisation of a deal with a committee of official lenders including India, Japan and France in Paris on Wednesday was a “significant milestone” in ending Sri Lanka’s debt crisis, the country’s finance minister Shehan Semasinghe said on Wednesday. The country was also in the process of signing a deal with China’s Export-Import Bank to restructure more than $4bn of debt, he added.
Sri Lanka has been struggling to overhaul its debts owed to both public and private sector creditors since a sharp economic downturn and currency shortages pushed it to default in 2022. President Ranil Wickremesinghe’s government is also racing to restructure a further $13bn of external debt owed to bondholders, as he tries to guide the country out of an acute economic crisis ahead of elections later in the year.