TOKYO (Reuters) – A group of Sri Lankan creditors could reach an agreement to reduce the South Asian country’s debt and extend repayment terms, Japan’s Jiji Press said on Wednesday, without naming or providing details of sources. reported to be high.
Japan will co-chair this group along with France and India. China is Sri Lanka’s largest bilateral creditor and has avoided joining the group as a full member.
Sri Lanka, mired in its worst financial crisis in decades, has been trying to reach a restructuring deal with its creditors since last year.
The agreement with the creditor group comes about a month after the debt-ridden island nation reached an agreement with the Export-Import Bank of China that covers about $4.2 billion in outstanding debt.
With the EXIM agreement, Sri Lanka clears the first round of relief packages under the International Monetary Fund (IMF) Board Program by December 6 and secures a second tranche of IMF funding of approximately $334 million. The Ministry of Finance says it can.
In doing so, Colombo seeks further clarity on debt restructuring negotiations with major bilateral creditors. This approval provides $330 million in funding and marks the progress of the four-year program.
(Reporting by Satoshi Kajimoto; Editing by Changran Kim and Miral Fahmy)
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