Skip to content
Search

Latest Stories

IMF asks Sri Lanka to speed up debt restructuring

The new government secured a $2.9bn (£2.33bn) bailout from the IMF in March under a 48-month programme

IMF asks Sri Lanka to speed up debt restructuring

The International Monetary Fund asked Sri Lanka on Tuesday (23) to speed its debt restructuring and warned any delays could undermine efforts to overcome the country’s worst economic crisis.

Sri Lanka expected a quick deal with creditors shortly after defaulting on its $46 billion (£37.03bn) foreign debt in April last year, but restructuring talks began in earnest only last month.


The economic crisis led to severe shortages of food, fuel and medicines last year and triggered months of protests that led to the toppling of former president Gotabaya Rajapaksa in July.

The new government secured a $2.9bn (£2.33bn) bailout from the IMF in March under a 48-month programme that commits Colombo to painful reforms. Colombo has doubled taxes and announced it is selling off state enterprises to boost the balance sheet, but the IMF said more needed to be done.

“The mission discussed additional fiscal efforts that will be critical to ensure successful revenue mobilisation,” the IMF said at the end of a 12-day staff-level visit for talks with Colombo.

The IMF delegation said they expected more progress by the first formal review of the bailout programme in September. “Achieving timely restructuring agreements with creditors in line with the program targets by the time of the first review is essential to restoring debt sustainability.

“Keeping up the reform momentum and ensuring timely implementation of program commitments... are key for Sri Lanka to emerge from the economic crisis,” the IMF said in a statement.

Foreign debt restructuring was held up as the country’s main bilateral creditor, China, was initially reluctant to take a haircut and instead offered more loans to pay off old debts.

Just over $14bn (£11.27bn) of the total foreign credit is bilateral debt to foreign governments, 52 per cent of which is owed to China.

Beijing initially proposed a two-year moratorium on the repayment of its debts, but without accepting a reduction in the amount, an insufficient concession for the IMF.

Terms of China’s debt restructuring have not been made public. Beijing gave financial assurances in March allowing the IMF to release $330 million, the first tranche of the bailout package.

The IMF expects Colombo to restructure its domestic debt too. The government’s local debt was estimated at about 15,033 billion rupees ($50bn/£4.02bn) as of the end of last year.

Opposition parties have warned that any trim to the rupee debt could send the entire domestic financial system into a tailspin, but the Central Bank of Sri Lanka has said it will ensure the stability of commercial banks.

(AFP)

More For You

Indian restaurant loses licence after Home Office catches illegal workers

Mumbai Local has been stripped of its licence by Harrow council. (Photo: LDRS/Google Maps)

Indian restaurant loses licence after Home Office catches illegal workers

AN INDIAN restaurant in north London has lost its licence after it was found to have repeatedly employed illegal workers.

Harrow council determined that the evidence suggested that using illegal workers was a “systemic approach” to running the premises and it had a “lack of trust” in the business to comply with the law.

Keep ReadingShow less
Trump sees Modi, Putin closer to Xi, but insists US-India ties intact

FILE PHOTO: US president Donald Trump meets with Indian prime minister Narendra Modi at the White House in Washington, D.C., U.S., February 13, 2025. REUTERS/Kevin Lamarque

Trump sees Modi, Putin closer to Xi, but insists US-India ties intact

US PRESIDENT Donald Trump said India and Russia seem to have been "lost" to China after their leaders met with Chinese president Xi Jinping this week, expressing his annoyance at New Delhi and Moscow as Beijing pushes a new world order.

"Looks like we've lost India and Russia to deepest, darkest, China. May they have a long and prosperous future together!" Trump wrote in a social media post accompanying a photo of the three leaders together at Xi's summit in China.

Keep ReadingShow less
Farage pledges Reform UK election push as Tories, Labour falter

Nigel Farage gestures as he speaks during the party's national conference at the National Exhibition Centre in Birmingham, Britain, September 5, 2025. REUTERS/Isabel Infantes

Farage pledges Reform UK election push as Tories, Labour falter

POPULIST leader Nigel Farage vowed to start preparing for government, saying the nation's two main parties were in meltdown and only his Reform UK could ease the anger and despair plaguing the country to "make Britain great again".

To a prolonged standing ovation by a crowd at the annual party conference on Friday (5), Farage for the first time offered a vision of how Britain would be under a Reform government: He pledged to end the arrival of illegal migrants in boats in two weeks, bring back "stop-and-search" policing and scrap net zero policies.

Keep ReadingShow less
Shabana Mahmood

Newly appointed home secretary Shabana Mahmood arrives at Number 10 at Downing Street as Keir Starmer holds a cabinet reshuffle on September 5, 2025. (Photo: Getty Images)

Shabana Mahmood named home secretary, Lammy deputy to Starmer in major reshuffle

Highlights:

  • David Lammy becomes deputy prime minister while keeping foreign affairs brief
  • Angela Rayner resigned after admitting underpaid property tax
  • Lisa Nandy to stay on as culture secretary
  • Reshuffle marks first major shake-up of Starmer’s government

SHABANA MAHMOOD has been appointed home secretary in a major reshuffle of prime minister Keir Starmer’s cabinet following the resignation of deputy prime minister Angela Rayner.

Keep ReadingShow less
Epping protests

The protests outside the Bell Hotel in Epping triggered a series of demonstrations across the country during heightened tensions over immigration. (Photo: Getty Images)

Asylum seeker convicted of sex assaults case that led to protests

AN ETHIOPIAN asylum seeker, whose arrest in July led to protests outside a hotel near London where he and other migrants were housed, has been found guilty of sexually assaulting a teenage girl and another woman.

The protests outside the Bell Hotel in Epping, about 20 miles (30 km) from London, triggered a series of demonstrations across the country during heightened tensions over immigration.

Keep ReadingShow less