It’s in China’s interest to restructure Sri Lanka’s debt: Yellen

Bali [Indonesia], July 15 (ANI): Amid the ongoing financial crisis in island nation, US Treasury Secretary Janet Yellen has said that China is a “very important” creditor of Sri Lanka and it would likely be in the interest of both countries if Beijing participated in restructuring Colombo’s debt.

During a press conference on the sidelines of a meeting of G20 finance officials on the Indonesian island of Bali on Thursday, Yellen said that she would urge other members of the Group of 20 major economies to put pressure on China to be more cooperative in long-stalled efforts to restructure the debts of countries in debt distress, including Sri Lanka.

“China is, of course, a very important creditor of Sri Lanka. Sri Lanka is clearly unable to repay that debt. And it’s my hope that China will be willing to work with Sri Lanka to restructure the debt — it would likely be both in China and Sri Lanka’s interest,” the US Treasury Secretary said.

According to central bank data, Sri Lanka owed China USD 3.5 billion by the end of 2020, excluding loans to state-owned firms.

Sri Lanka’s fourth-largest lender is China, and the country is expected to repay USD 4.5 billion in debt in 2022, beginning with a USD 500 million international sovereign bond repayment on January 18.

The country is facing a severe shortage of fuel and other essential supplies and is in the throes of its worst economic crisis with soaring inflation. The oil supply shortage has forced schools and government offices to close until further notice.

Reduced domestic agricultural production, a lack of foreign exchange reserves, and local currency depreciation have fuelled the shortages.

The economic crisis will push families into hunger and poverty – some for the first time – adding to the half a million people who the World Bank estimates have fallen below the poverty line because of the pandemic.

Meanwhile, Ranil Wickremesinghe on Friday sworn in as the interim President after Parliament Speaker Mahinda Yapa Abeywardena accepted the resignation of Gotabaya Rajapaksa.

Wickremesinghe was sworn in as the Acting President before Chief Justice Jayantha Jayasuriya, Daily Mirror reported citing Prime Minister’s Media Division.

He was appointed as the acting President by former President Gotabaya Rajapaksa on July 13 after the latter fled to the Maldives due to the massive protest demanding his resignation.

Gotabaya Rajapaksa submitted his resignation letter yesterday after arriving in Singapore, officially vacating the post of President. (ANI)