China remains the largest bilateral lender in Sri LankaRepresenting US $ 4.66 billion from US $ 10.58 billion borrowed from other nations. Japan is the second largest, with just over $ 2.5 billion in loans.
SRI LANKA had concluded debt agreements with the Chinese export-importing bank and China Development Bank last year.
Japan is the first country of the Official Committee for Creditors of 17 members (OCC) of Sri Lanka to conclude a debt agreement, said Sri Lankan officials. Beijing is not a member of the OC.
The government of the left president Anura Kumara Dissanayake, who came to power in September, had hoped to finalize the debt agreements before the end of last year.
The island nation was lacking on its outer debt of US 46 billion dollars in April 2022 after having lacked currency to finance even the most essential imports, such as food and fuel.
Its economy has since recovered as a result of an IMF rescue and the implementation of austerity measures aimed at repairing the ruin finances of the government.
In November, Dissanayake announced that Sri Lanka would honor an agreement obtained by its predecessor to restructure $ 12.55 billion in international sovereign bonds, a key condition for maintaining the baking loan of $ 2.9 billion US and four years.
A majority of private creditors in the South Asian country agreed in September for a 27% haircut on their loans.
Sri Lanka obtained its bailiff from the IMF in 2023 after having doubled taxes, withdrawing energy grants and increasing the prices of essential goods to strengthen the revenues of states.
