US pleased with India's support to Sri Lanka, says ready to help unlock IMF assistance

COLOMBO (News 1st) - US Ambassador to Sri Lanka Julie J. Chung said she was pleased to see India confirm strong support for Sri Lanka's prospective EFF program with the International Monetary Fund.

In a tweet, the Ambassador welcomed India's stance to commit to providing financing/debt relief transparently & in coordination with the Paris Club. 

India has told the International Monetary Fund that it confirms its strong support for Sri Lanka's prospective EFF-supported program.

According to a letter seen by News 1st from Indian authorities to IMF Chief Kristalina Georgieva, India had noted it will commit to supporting Sri Lanka with financing/ debt relief consistent with restoring Sri Lanka's public debt sustainability under the IMF -supported program and ensuring that the program is fully financed as projected by IMF staff.

"In this context, we commit to continuing negotiations with the Sri Lankan government along with the Paris Club on a medium-to-long term debt treatment through maturity extension and interest rate reduction or any other financial operations that would deliver similar financing/ debt relief," noted the letter.

According to this letter seen by News 1st, India says that the financing/ debt relief provided by Export-Import Bank of India will be consistent with restoring debt sustainability under the IMF-supported program.

"We look forward to continuing cordial and in-depth discussions with the Sri Lankan authorities, IMF and the Paris Club with a view to finalizing the specifics of this financingj debt relief in the coming weeks," the letter added. 

However, it had noted that the Sri Lankan authorities are expected to seek equitable debt treatments from all commercial creditors and other official bilateral creditors, as well as adequate financing contributions from the multilateral development banks. 

Sri Lanka requires the backing of China and India - its biggest bilateral lenders - to reach a final agreement with the IMF on the $2.9 billion loan that is essential to help the country emerge from its worst financial crisis in seven decades.

US Ambassador to Sri Lanka Julie J. Chung said that the US stands ready to assist Sri Lanka to unlock IMF assistance when all creditors agree to fair & equitable treatment.