India formally notifies support to restructure Sri Lanka’s debt-report

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India formally notified on Monday that it would support Sri Lanka’s debt restructuring plan, Bloomberg reported on Tuesday citing a source with knowledge of the matter, adding an announcement could come later in the day.

New Delhi’s backing public finance in order to unlock a $2.9 billion IMF loan that was agreed  in September.

“Talks with bilateral lenders including India and China to restructure Sri Lanka’s debt are progressing well and we are hopeful; of finalizing support from the IMF in the first quarter of 2023,” Sri Lanka’s cabinet spokesperson, Bandula Gunawardana told reporters on Tuesday.

Sri Lanka has to secure prior financing assurance from creditors, but is a heavy debt burden on a sustainable path, and increase public revenue before the global lender will disburse the funds, the IMF has said.

The IMF has stressed the importance of joint talks involving three of Sri Lanka’s main bilateral creditors-China, Japan, and India.

Sri Lanka’s cabinet said on Tuesday that it would cut its recurrent budget expenditure by 6% in 2023 and had approved a proposal to delay the salaries of some public employees to manage public finances.

 

 

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