LONDON: Sri Lanka expects the International Monetary Fund board to approve a $2.9 billion loan by year-end, officials from the country's central bank told investors during a virtual presentation.
Sri Lanka is struggling with its worst economic crisis in more than seven decades, which has led to shortages of essentials and the ouster of a president.
The IMF board approval of the loan is expected by mid-December. From now until mid-November, the country aims to get financing assurances from public- and private-sector creditors.
Sri Lanka targets agreements in principle with all its creditors between the last quarter of the year and the second quarter of 2023, the sources participating in the event said.
The country earlier this month reached a staff-level agreement with the IMF for the loan of about $2.9 billion, contingent on it receiving financing assurances from official creditors and negotiations with private creditors.
"It's going be very tough, but so much of it depends on China, basically one creditor, so maybe it can be done," said a bondholder who requested anonymity.
The virtual presentation to investors on Friday marks the first time the Sri Lankan government has formally engaged with private bondholders after deciding earlier this year that it would restructure $13 billion in international sovereign bonds, held by private creditors such as asset managers BlackRock and Ashmore.
Central Bank Governor Nandalal Weerasinghe and Treasury Secretary Mahinda Siriwardena participated in the virtual presentation, along with representatives of financial and legal advisers Lazard and Clifford Chance.
"This was a fairly typical kind of introductory presentation that we've seen a lot of times before," the bondholder said. "The government lays how bad the situation is basically trying to anchor expectations towards a deep haircut."
Sri Lanka also needs to renegotiate debt with bilateral creditors such as China, Japan and India. The sources attending the presentation said Sri Lankan government officials said the country is encouraging an ad-hoc bilateral creditor coordination platform to obtain financing assurances from official bilateral creditors.
As a middle-income country, according to the World Bank, Sri Lanka is not able to engage in talks with bilateral creditors under the G20 common framework for debt treatments.
The country officials added that the ad-hoc platform should be established by the creditors themselves as soon as possible, while the government is only promoting it.
The sources said Lazard, which is advising the government, said that this initiative would resemble the G20 platform. It will offer equal footing for creditors to access relevant information and a forum to discuss emergency credit lines, the presentation showed, according to the sources.
KARACHI: Attock Refinery Limited has shut down its main crude distillation unit due to high stocks of diesel, which...
KARACHI: Pakistan's information technology (IT) exports jumped 37 percent year-on-year to a record $306 million in...
KARACHI: Foreign direct investment (FDI) in Pakistan rose 52 percent year-on-year to a 21-month high of $258 million...
COLOMBO: Sri Lanka's consumer price inflation dropped to 2.5 percent in March from 5.1 percent in February, official...
HOUSTON: US crude futures returned to positive territory on Monday after falling on easing fears of a wider conflict...
KARACHI: The rupee ended slightly lower on Monday due to the dollar demand from importers and weak supplies, dealers...
KARACHI: The National Tariff Commission (NTC) on Monday assured the business community that numerous issues...
KARACHI: The Pakistan Stock Exchange (PSX) has inked a mutual understanding with the London Stock Exchange Group...