Representatives from Sri Lanka’s financial and legal advisors, Lazard and Clifford Chance LLP now in Colombo have started their preliminary observations of the island nation’s debt restructuring amidst the country’s worst economic crisis , Finance Ministry sources said.
Talks with creditors and bondholders are due to take place in the coming weeks ,a senior ministry official said that it is a time consuming affair as itt will take at least a year to successfully complete Sri Lanka’s external debt restructuring process
Debt restructuring talks will be a precursor for IMF staff-level agreement and expedite IMF board of Directors approval for lending arrangement and financial disbursements, he added.
In the backdrop of the international financial and legal advisors preliminary observation process , the ten member IMF team began their discussions with Prime Minister and Finance Minister Ranil Wickremasinghe in Colombo on Monday morning.
Sri Lanka expects $ 4-5 billion in loan assistance from the International Monetary Fund. Earlier, Prime Minister Ranil Wickremesinghe had stated that the loan assistance from this fund would enable Sri Lanka to obtain assistance from other countries.
The IMF team is now in Colombo during their visit seven day viist from June 20-30 to continue discussions on an economic program that could be supported by an IMF lending arrangement, building on the progress made during the May 9-24 virtual mission.
The IMF reaffirmed their commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies
The Economic Stabilization Committee head former Treasury Secretary Dr. R.H.S. Samaratunga Central Bank Governor Dr. Nandalal Weerasinghe, Treasury Secretary Mahinda Siriwardena attended discussions
Meanwhile Police dispersed a group of protesters when they gathered near the Finance Ministry building and tried to stage a protest against the discussions with the IMF ,several eyewitnesses said.
The IMF team is on a visit to the island for talks on a bailout economic programme as Sri Lanka is facing its worst financial crisis
“Even if a staff-level agreement is reached, final programme approval will be contingent upon assurances that official creditors, including China, are willing to provide adequate debt relief,” said Patrick Curran, senior economist at U.S. investment research firm Tellimer.
