Indian Foreign Minister Subrahmanyam Jaishankar (left) met with Sri Lankan President Ranil Wickremesinghe, expressing support for debt restructuring and increasing investment in Sri Lanka.

(Associated Press)

[Financial Channel/Comprehensive Report] Sri Lanka, which has stepped into China’s “Belt and Road” debt trap and broke its debt default, is seeking IMF’s financial aid of up to 2.9 billion US dollars. Currently, it needs the support of China and India, the two largest creditors, to reach a final agreement with the IMF. protocol.

India has agreed to support Sri Lanka's debt restructuring plan, leaving China silent.

With a population of 22 million, Sri Lanka has been dealing with various challenges in the past year, from foreign exchange shortages to runaway inflation and a severe economic recession, and finally detonated the worst economic crisis since independence from Britain in 1948, and broke out in debt default.

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According to statistics, as of the end of last year, Sri Lanka owed China US$7.4 billion, accounting for nearly one-fifth of its public external debt, and owed India US$1 billion.

In order to save the economic downturn, Sri Lanka is seeking the IMF's 2.9 billion US dollars in financial aid, but it needs the support of China and India, the two largest bilateral creditors, to reach a final agreement with the IMF.

Indian Foreign Minister Subrahmanyam Jaishankar recently visited Sri Lanka, emphasizing that Indian companies will be encouraged to invest more in Sri Lanka and focus on core areas such as energy, tourism and infrastructure. The two countries will also sign a contract covering three islands in northern Sri Lanka. Memorandum of Understanding for Renewable Energy Projects.

At the same time, India has also told the IMF that it strongly supports Sri Lanka's debt restructuring plan and will provide Sri Lanka with a quick aid of US$4 billion.

Jaishankar said that we believe that Sri Lanka's creditors should take active steps to promote its recovery, and India has decided not to wait for others, but to do what we think is right.

We provided a financial guarantee to the IMF to clear the way for Sri Lanka.

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