Sri Lanka says it struck a deal with creditors on debt restructuring to clear way for IMF funds

By BHARATHA MALLAWARACHI
Associated Press

COLOMBO, Sri Lanka (AP) — Sri Lanka says it has reached an agreement in principle with a group of creditors including India and Japan on debt restructuring. It’s a crucial move toward unlocking a second instalment of a $2.9 billion bailout package from the International Monetary Fund. The Finance Ministry said the agreement on Wednesday with the Official Credit Committee covers approximately $5.9 billion of outstanding public debt. Sri Lanka declared bankruptcy in April 2022 with more than $83 billion in debt — more than half of it to foreign creditors. Its economy was plunged into crisis, with severe shortages of food, fuel and other necessities. The IMF agreed in March to a $2.9-billion bailout package, releasing the first payment shortly thereafter.