Sri Lanka secures deal to restructure $12.6bn of bonds – Central Banking

Sri Lanka has successfully secured a deal to restructure $12.6 billion of its debt held with international sovereign bondholders, the finance ministry announced on July 4. This agreement comes on the heels of two separate deals reached last week with bilateral lenders and the Export Import Bank of China in Paris, totaling $10 billion.

Finance minister Shehan Semasinghe described the deal as a “milestone” in Sri Lanka’s journey towards economic revival. The restructuring of such a significant amount of debt is seen as a positive step for the country’s financial stability.

However, the International Monetary Fund (IMF) is yet to review the deal to determine if it aligns with Sri Lanka’s debt sustainability targets. This review will be crucial in assessing the long-term impact of the restructuring on the country’s economy.

Overall, the successful restructuring of such a substantial amount of debt is a significant development for Sri Lanka and will likely have a positive impact on its financial outlook.