Sri Lanka in early debt refinancing talks with China

On Tuesday, a spokesman for Sri Lanka’s cabinet said, Sri Lanka has started negotiations with China on refinancing its debt as it struggles to manage its worst financial crisis in decades.

“Now since the IMF is willing engage with Sri Lanka the other countries are aware we have support. Already we have been promised support from the World Bank and other agencies,” said Nalaka Godahewa, Sri Lanka’s media minister. He went on to add, discussions with China were at an early stage.

Last week, Sri Lankan Finance Minister Ali Sabry visited the United States, the World Bank, India and others to look for financing help. Colombo has suspended payments on portions of its $51 billion in external debt.

The Sri Lankan economy took a massive beating following tax cuts by the populist government, which has led to dwindling foreign currency reserves, shortages of food, medicine and fuel, leading to sporadic violent street protests.

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