Japan says no pact yet with Sri Lanka on debt restructure talks | The Financial Express

Japan says no pact yet with Sri Lanka on debt restructure talks

Sri Lanka has to renegotiate around $30 billion of foreign debt, including with bilateral creditors such as China, Japan and India, with one of them likely to co-chair the talks.

Japan says no pact yet with Sri Lanka on debt restructure talks
Japanese Finance Minister Shunichi Suzuki. (Photo: REUTERS)

Japan has not yet reached an agreement to co-chair a debt summit with Sri Lanka’s creditors, a government official in Tokyo said on Thursday, as the island nation struggles to find a way out of a crippling economic crisis.
Sri Lanka has to renegotiate around $30 billion of foreign debt, including with bilateral creditors such as China, Japan and India, with one of them likely to co-chair the talks.

“We have not reached such an agreement. It might be their wishful thinking but the situation remains unchanged,” a senior Japanese government official with knowledge of the matter told Reuters on condition of anonymity.

The denial from Tokyo came after less than an hour after Sri Lankan President Ranil Wickremesinghe’s office said on Thursday that Japan had agreed to co-chair the meeting with negotiators.

Wickremesinghe’s office later issued a clarification saying Sri Lanka had requested Japan to co-chair the summit. Japan would also help Sri Lanka in its credit restructuring process, Wickremesinghe’s office said.

Also Read: Crisis-hit Sri Lanka strikes preliminary loan pact with IMF

“Japan will stand ready to provide full support for Sri Lanka’s debt restructuring providing that necessary conditions are met,” the Japanese government official said.

Sri Lanka is facing its worst economic crisis in decades, with severely depleted foreign exchanges reserves leading to prolonged shortages of essentials, including fuel and food.

Also Read: India holds debt restructuring talks with Sri Lanka

Out of Sri Lanka’s total bilateral debt of $10 billion, Japan holds around $3.5 billion worth, amounting to 4.4% of Sri Lanka’s GDP, according to government and IMF data.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos
7 Photos
Assembly Election Results 2022: BJP’s celebratory dance in Gujarat, Congress exudes confidence in Himachal – See Photos
10 Photos
Realme 10 Pro Plus launched in India: The 10-point rough cut
9 Photos
AAP sweeps away 15 year BJP reign in MCD election – Photos from celebrations