China said the “ball is in Sri Lanka’s court” as it avoided giving a direct response to the island nation’s request to restructure its debt, according to a media report here on Saturday.
Sri Lanka has urged China to restructure its debt as the country continues to suffer from an acute economic crisis. Sri Lanka is estimated to owe debt payments of $1.5 billion to $2 billion this year to China. Overall, China’s loans and investments in Sri Lanka have been estimated at more than $8 billion over the past few years.
But Beijing has not made a public pledge for Sri Lanka’s debt relief aid so far.
Quoting a spokesperson for the Chinese Embassy, the Daily Mirror news site reported that Beijing informed the Sri Lankan Ministry of Finance three months ago of its willingness to discuss how to resolve the problem of debt with Chinese banks.
China has encouraged its banks to discuss it. China’s position was also communicated during the phone conversation between Chinese Premier Li Keqiang and Sri Lankan Prime Minister Mahinda Rajapaksa, he said.
We have sent proposals to the Ministry of Finance. But, there was no response from them. In addition, Sri Lanka insisted that it first conclude the agreement with the International Monetary Fund (IMF). The ball is in Sri Lanka’s court, the spokesman said.
Sri Lanka’s total bilateral debt was estimated at $6.2 billion at the end of 2020 by the IMF. Japan and China hold the largest shares, according to the report.
India has provided about $4 billion to help keep Sri Lanka’s economy afloat, mostly through lines of credit and swaps this year. Sri Lanka also has $14 billion in international sovereign bond debt.
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