The International Monetary Fund is considering approving its guarantee to Sri Lanka, even without formal assurances of China’s debt restructuring assistance.
Bloomberg International News Service has revealed that discussions are currently underway.
China is one of Sri Lanka’s largest bilateral creditors.
The report indicates that there is a possibility of considering the approval of Sri Lanka’s loans under a rarely used policy of the International Monetary Fund.
It has the ability to approve the loan of the International Monetary Fund even when a party does not officially give its assurance for debt restructuring.
This report shows that China’s assurance is the only prerequisite for Sri Lanka to be able to obtain this loan guarantee.
This provision aims to prevent a creditor from blocking aid to a country in dire financial need.
Accordingly, even in such a case, this gives an opportunity to demonstrate the commitment of a country to meet the terms of the loan.
The International Monetary Fund had previously made a statement that Sri Lanka had met the prerequisites for obtaining this loan.
The loan to be given to this country by the International Monetary Fund is 2.9 billion US dollars.
