LONDON: China's pledge to support Sri Lanka's debt reorganization, a major step for the island nation in securing an IMF lifeline, provides little clarity on how negotiations will unfold or whether this could herald progress for other heavily indebted nations. Analysts remain cautious on how significant Ch
LONDON: China's pledge to support Sri Lanka's debt reorganization, a major step for the island nation in securing an IMF lifeline, provides little clarity on how negotiations will unfold or whether this could herald progress for other heavily indebted nations.
The Export-Import Bank of China told Sri Lanka in a letter that it will try to expedite debt talks in the months ahead, in addition to a two-year moratorium secured previously."It is hard to see whether this is a change in Chinese policy towards sovereign restructuring deals going forward or a one-off for this case. My guess: the latter," said Mitu Gulati, a law professor at Duke University in the US.
"The next step for Sri Lanka will be to turn these financing assurances into a concrete restructuring deal, ideally before the first or second program review, which is something that has proven difficult so far in other country cases," said Theo Maret, senior research analyst at Global Sovereign Advisory, in Paris.
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