Sri Lanka's Strategic Debt Restructuring: A New Chapter in Economic Stability

Sri Lanka's new government has ratified a USD 14.2 billion debt restructuring agreement crucial for maintaining debt sustainability, approved by the IMF. This decision, supported by President Anura Kumara Dissanayake, continues the policy initiated by his predecessor. The agreement includes exchanging new bonds for existing ones, aiming to ensure economic stability.

The Sri Lankan government, under its new leadership, has announced the ratification of a USD 14.2 billion debt restructuring agreement. The move aims to maintain debt sustainability, a crucial initiative endorsed by the International Monetary Fund (IMF), through the exchange of new bonds for existing ones.

The development follows the IMF's approval for a staff-level agreement, ensuring the continuation of the bailout package supported by President Dissanayake, despite his previous election promises to renegotiate terms. The initial debt restructuring was devised during the tenure of former President Wickremesinghe, shortly before the presidential elections.

As a next step, separate agreements with various countries are expected, with a deadline set by the end of the year. Under this agreement, which leverages the IMF's Extended Fund Facility, Sri Lanka hopes to cement its path towards economic recovery and stability.

(With inputs from agencies.)