China confirms offer to Sri Lanka of debt moratorium

BEIJING (AP) — China has confirmed it is offering Sri Lanka a two-year moratorium on loan repayments as the Indian Ocean island nation struggles to restructure $51 billion in foreign debt that pushed it into a financial crisis. China is one of Sri Lanka’s biggest lenders. It has been the biggest uncertainty in debt restructuring. The International Monetary Fund agreed to provide a $2.9 billion emergency loan but wanted other creditors to cut the amounts they are owed. Beijing resisted, possibly fearing other borrowers would demand similar relief. Sri Lanka borrowed heavily from China to build an airport and other projects that failed to pay for themselves.