Creditor committee to ensure comparable treatment; IMF expects negotiations to end by 1st program review

IMF Deputy Managing Director says that it is encouraging to see official creditors organizing themselves around a coordinated platform which helps ensure the comparability of treatment among creditors.

Speaking at the Creditors’ Meeting of Sri Lanka’s debt restructuring negotiation process Kenji Okamura said that expeditious resolution is needed for Sri Lanka to emerge as quickly as possible from its crisis and credit support is indispensable for restoring debt sustainability which is a key requisite for continued IMF financing.

“We hope all official bilateral creditors can participate. And the negotiations can progress swiftly with a view to completing them by the 1st Program review,” Okamura said.

“The fund supports the positive momentum emerging from today’s announcement and will continue to support the debt restructuring process.”

Indian Minister of Finance Nirmala Sitharaman said:

“I am pleased to share that India joins hands with Japan and France to Co-chair and lead a coordinated debt restructuring process to finalize the specifics of the debt treatment as a close and longstanding friend of Sri Lanka. Close coordination between Sri Lanka and all its creditors will be critical to expediting a debt treatment that will restore debt sustainability in the country. We believe that such collaboration is important to ensure transparency and equality and treatment of all creditors in the debt restructuring discussions, India is committed to supporting Sri Lanka to facilitate an early outcome of the debt restructuring process.”

France Director General of the Treasury Emmanuel Moulin said:

“Our meeting today shows that we are able to find new ways to deal with the issue of debt and take into account the new landscape of the debt and the multilateral efforts where Japan, India, and France as chair of the Paris Club are joining forces to find a solution. I want to thank the Minister of Finance from India and from Japan for all the efforts to gather this Committee. I want to commend the government of Sri Lanka for its resolve in implementing the policy measures required to restore macroeconomic stability. Now creditors should keep the momentum and start the restructuring process in a coordinated manner to ensure transparency and comparability of treatment based on their financing assurances and IMF parameters, the Sri Lankan Government’s public commitment in favour of transparency, information sharing, and comparability of treatment lay a strong foundation for the debt treatment. Ahead, this creditor committee is open to other creditors who are invited to join. In any case, we will maintain coordination with them in order to make sure that we have a comparable treatment and the appropriate treatment, and we are ready to hold the first meeting as soon as possible.”

President and Minister of Finance Ranil Wickremesinghe said:

“Let me thank the Government of Japan for organizing this crucial meeting together with the governments of India and France. Today’s event marks the beginning of a coordinated effort of official bilateral presentation to make swift progress in resolving Sri Lanka’s distress. We in Sri Lanka have made a series of critical policy adjustments in accordance with the extended arrangement under the EFF. I am also submitting the extended arrangement to Parliament for its approval. Thereafter, the government will bring legislation incorporating the main features of this arrangement. However, as you are aware domestic policy efforts in this context are insufficient to resolve the deep imbalances in our economy. We thank the authorities of the Paris Club as well as non-Paris Club nations offering timely financing assurances and the consent that enables the IMF to approve Sri Lanka’s request for a fund-supported comprehensive economic adjustment program, we also thank private creditors for supporting this effort. My government remains committed to continue to engage with all creditor nations and other stakeholders in a transparent manner based on the principle of comparable treatment. Let me once again place on record my deep appreciation for your efforts in assisting Sri Lanka. I hope that our other bilateral and multilateral partners as well as commercial creditors will also join you in providing assistance to Sri Lanka to successfully complete the debt restructuring process. We rely on your continued and unwavering support to re-emerge from this crisis and establish a solid foundation enabling us to uplift the socio-economic well-being of our population and regain our national pride. Thank you.”

Related: Creditors’ Meeting launched; Japan, India & France agree on swift debt restructuring negotiation for SL

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