Sri Lanka seals debt restructuring deal with France

Colombo, Jun 17 (PTI) Sri Lanka signed an agreement with France to reschedule a debt stock of 390 million euros until 2042, the Ministry of Finance announced on Tuesday, calling it a significant milestone in revamping the country's economy.

The agreement was signed on Monday.

“The signing of the bilateral Agreement with the Government of the French Republic in relation to the External Debt Restructuring Process is a significant milestone...and testament to the Government of Sri Lanka's commitment to conclude the restructuring process as soon as possible to restore debt sustainability and thereby revamp Sri Lanka's economy," the ministry release said.

The agreement would pave the way to rescheduling 390 million Euros until 2042, officials said.

France, the fourth-largest public creditor of Sri Lanka, took the lead in the official creditor committee alongside Japan and India during the debt restructuring process, which was necessary for Sri Lanka to receive assistance from the International Monetary Fund (IMF).

The IMF’s reform-based fund facility of USD 2.9 billion over 4 years was the cornerstone of Sri Lanka staging recovery from bankruptcy.

In April 2022, the island nation declared its first-ever sovereign default since gaining Independence from Britain in 1948. The unprecedented financial crisis led the then president Gotabaya Rajapaksa to quit office in 2022 amid civil unrest. PTI Corr NSA NSA