Japan agrees to defer payments on US$ 225 mn due in 2005

Japan on Tuesday confirmed Sri Lanka’s calls to postpone up to US$ 220 mn in loans owed to the East Asian development partner this year. Japan on Tuesday confirmed Sri Lanka’s calls to postpone up to US$ 220 mn in loans owed to the East Asian development partner this year. The total US$ 225 mn debt moratorium is the largest component in the US$ 338 mn loan postponement Sri Lanka called for from the donor community in the wake of the December tsunami disaster.

Japan along with other bilateral donor partners have so far agreed to postpone or write-off close to US$ 350 million in loan repayments due in 2005.

The monies will help maintain Sri Lanka’s external reserves – dollars used to finance an inflated import bill brought on by the tsunami reconstruction effort.

However most of the moratoriums or write-offs are limited to 2005, with the exceptions of India, Britain and Canada.

India on Tuesday at the end of the two day Development Forum held in Kandy agreed to differ payments on US$ 30 million over three years of a total US$ 95 million owed to it by Sri Lanka.

Britain and Canada meanwhile together have agreed t