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

Starmer-Getty

Starmer is facing a Labour backbench revolt over plans to reform special needs support in schools without guaranteeing existing legal rights. (Photo: Getty Images)

Getty Images)

Starmer faces Labour pushback over SEND reform plans

KEIR STARMER is facing a backlash from Labour MPs over plans to reform special educational needs and disabilities (SEND) support, after ministers stopped short of guaranteeing legal rights for parents.

Education Secretary Bridget Phillipson said the government was committed to reforming the current system, which costs £12 billion a year. However, she did not confirm if legally enforceable rights, such as those provided by education, health and care plans (EHCPs), would remain.

Keep ReadingShow less
Heavy rain and thunderstorms hit London

Londoners faced a wet and stormy start to the week

iStock

Heavy rain and thunderstorms hit London before 30°C heatwave

Key points

  • Heavy rain and thunderstorms drench London at the start of the week
  • Temperatures set to rise with highs of 31°C expected by Thursday
  • Heatwave could be declared by Friday if warm conditions persist
  • Night-time temperatures to remain high, increasing discomfort
  • UV and pollen levels forecast to be very high across the south

Thunderstorms soak London before summer heat returns

Londoners faced a wet and stormy start to the week as heavy rain and overnight thunderstorms swept through the capital. Monday morning saw widespread downpours, leaving commuters reaching for umbrellas and Wimbledon ticket hopefuls queuing in ponchos.

The unsettled conditions followed a burst of thunderstorms on Sunday afternoon and continued into the early hours of Monday, prompting caution across the city. The Met Office has not issued a formal weather warning for thunderstorms, but conditions remain unstable.

Keep ReadingShow less
National Trust sets vision to heal
nature and engage more Asians

Lisa Nandy, Steve Reed, René Olivieri and Hilary McGrady at a National Trust event marking its 130th anniversary

National Trust sets vision to heal nature and engage more Asians

THE National Trust, which is seeking to broaden its appeal to British Asians, is marking its 130th anniversary with a renewed commitment to restoring nature and widening access under a 10-year strategy.

Its director-general, Hilary McGrady, also aims to inspire more people to get involved in caring for the country’s natural resources.

Keep ReadingShow less
 7/7 bombings

The King said the public should draw on the 'extraordinary courage and compassion' shown in response to the attacks. (Photo credit: X/@RoyalFamily)

Starmer and King Charles pay tribute on 20th anniversary of 7/7 bombings

PRIME MINISTER Keir Starmer and King Charles on Monday paid tribute to the unity shown in the aftermath of the 7 July bombings in London, as the country marked 20 years since the attacks.

On 7 July 2005, four Islamist extremists carried out suicide bombings at Aldgate Station, Edgware Road, King's Cross and Tavistock Square. The attacks killed 52 people and injured hundreds more.

Keep ReadingShow less
Navroop Singh

Navroop Singh was convicted of five charges including rape and was sentenced on July 4 at Isleworth Crown Court. (Photo credit: Metropolitan Police)

Man jailed for life over rape and attempted rape in west London

A 24-year-old man has been sentenced to life in prison for rape, attempted rape and firearm offences following a Metropolitan Police investigation in west London.

Navroop Singh, of Mellow Lane East, Hayes, was convicted of five charges including rape and was sentenced on Friday, July 4 at Isleworth Crown Court. He must serve a minimum of 14 years.

Keep ReadingShow less