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- Sri Lanka has achieved an “agreement in principle” with India and the Paris Club group of creditors on a debt treatment plan.
- This will help Sri Lanka enable Sri Lanka to access the next installment of the International Monetary Fund’s almost $3 billion recovery package.
- Sri Lanka and the Official Creditor Committee (OCC) reached an agreement on the main parameters of debt treatment.
- These parameters are consistent with those of the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF.
- Sri Lanka decided to default on its almost $51 billion foreign debt.
- The OCC was formed by major lenders in May 2023 in response to Sri Lanka’s request for debt treatment.
- It is co-chaired by India, Japan and France as chairs of the Paris Club.
- China has opted to stay out of the platform. China has attended the meetings as an observer. It is Sri Lanka’s largest bilateral creditor.
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