Sri Lanka Interim Debt Policy Overview slide image

Sri Lanka Interim Debt Policy Overview

Financing assurances from bilateral creditors are required as a pre-requisite to the IMF Board adoption of the Program The IMF does not lend to countries whose debt is deemed unsustainable, requiring Sri Lanka to undertake an upfront comprehensive debt treatment. In practice, this requires financing assurances to be given by the bilateral creditors, resulting in a sufficient level of comfort to the IMF that bilateral creditors will support Sri Lanka's efforts to restore public debt sustainability FOR PUBLIC CREDITORS What are financing assurances? Bilateral financing assurances are a commitment from official bilateral creditors to grant Sri Lanka a debt treatment compatible with the macroeconomic framework and debt sustainability constraints underpinning the contemplated IMF program. They are the flagship step to the IMF being able to move forward with a program for Sri Lanka Aug. 2022 Sep. Oct. What does it mean for private creditors? Private financing assurances are considered as obtained by the IMF once Sri Lanka is making a "good faith" effort to reach a collaborative agreement with its private creditors, defined as: • Engaging in early dialogue Sharing relevant information on a timely basis Giving creditors the early opportunity to provide input in the framework underpinning the debt restructuring From SLA to mid-November 2022 • Window to obtain financing assurances from public and private partners before IMF Board Approval, envisaged for mid-December Nov. Dec. Jan. 2023 SLA O IMF Board Approval 20
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