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Debt default, Sri Lanka expects China to save

Bloomberg news agency on April 12 quoted Sri Lanka’s Ambassador to China Palitha Kohona as saying above.

According to Kohona, China “made a financial commitment to Sri Lanka last week” and made arrangements for loans and credit lines.

In addition, Sri Lanka is asking China to borrow 1 billion USD to repay loans due in July this year as well as requesting a credit line of 1.5 billion USD to buy goods from the digital economy. 2 in the world, including textiles and garments for export.

Kohona only said Beijing’s financial support would come in a few weeks, without disclosing what conditions Colombo would have to meet.

In default, Sri Lanka looked forward to China's rescue - Photo 1.

Protests in the capital Colombo on April 11. Photo: EPA

Sri Lanka is facing its worst economic crisis in decades amid the fastest rise in consumer prices in Asia – around 19% – last month. Soaring consumer prices, widespread power outages and shortages of food and medical care led to a wave of protests across the country.

Recently, Mr. Kohona said that Sri Lankan President Gotabaya Rajapaksa had asked Chinese President Xi Jinping for credit support. Colombo officials also urged Beijing to resolve the financial problem as soon as possible.

Sri Lankan officials are expected to meet with International Monetary Fund (IMF) partners later this week to discuss a financial support package to help pay off $8.6 billion in debt this year. .

On April 12, Sri Lanka announced that it could not afford to pay its foreign debt worth 51 billion USD. Sri Lanka’s Finance Ministry urged creditors, including foreign governments, to delay interest payments or choose to receive the principal loan in Sri Lankan rupees.

“The government is taking urgent measures as a last resort to prevent further deterioration of Sri Lanka’s financial situation. The default is also intended to ensure fair and equal treatment of creditors for the until Sri Lanka is supported by the IMF,” said the Sri Lankan Finance Ministry.


According to Pham Nghia

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