Sri Lanka temporarily suspends foreign debt payments

COLOMBO: APRIL. 12 – Sri Lanka’s Finance Ministry on Tuesday said the government has decided to suspend normal debt servicing of all affected debts for an interim period till it puts together an orderly and consensual restructuring program supported by the International Monetary Fund (IMF).

In a statement, the ministry said debt repayments would be restructured in a manner consistent with an economic adjustment program supported by the IMF, which will apply to all debt repayments.

However, it said credit facilities and any amounts disbursed under existing credit facilities are not subject to this policy and shall be serviced normally.

The Finance Ministry said creditors, including foreign governments that had lent to the South Asian nation, were free to capitalize any interest payments due to them from Tuesday afternoon or opt for payback in Sri Lankan rupees.

Sri Lanka is presently in the midst of a severe economic crisis featuring shortages of foreign exchange, fuel and other essential supplies as well as rising inflation.

-Xinhua