Cash-strapped On the eve of an urgently required $2.9 billion IMF bailout, President Ranil Wickremesinghe’s office announced Monday that Sri Lanka is requesting a 10-year moratorium on its foreign debt.
The widely anticipated IMF rescue “will only give us a breathing space where they will say we are no longer bankrupt,” Wickremesinghe was cited as saying by his office.
At a gathering of students on Sunday in Colombo, Wickremesinghe said, “I believe we will be given at least 10 more years to repay all the money we have to repay this year.
His intentions to restructure Sri Lanka’s $46 billion external debt were not made explicit.
Sri Lanka defaulted on its foreign debt in April 2022 as the country plunged into its worst economic crisis, running out of cash to finance even the most essential imports and causing massive social unrest.
Widespread protests over economic mismanagement, acute shortages of food, fuel and medicines, and runaway inflation forced Wickremesinghe’s predecessor Gotabaya Rajapaksa to flee the country and resign in July.
The IMF’s executive board was expected to sign off on Colombo’s bailout application later on Monday after a long delay in securing financial assurances from China, Sri Lanka’s largest bilateral lender.
