Colombo, Sri Lanka ( Associated Press) — Sri Lanka’s government said on Tuesday it was discussing getting another loan from Beijing to pay off some of its debt to Chinese banks, after China told the nearly bankrupt island nation that it would Not in favor of restructuring of loans.
Sri Lanka has an external debt of about $ 7 billion this year and will have to repay $ 25 billion in the next five years. Severe shortage of foreign exchange means that the country takes money to buy imported goodsDue to which there is shortage of food, fuel and other essential commodities.
The economic crisis sparked weeks of protests There are demands across the country for the resignation of President Gotabaya Rajapaksa.
Government spokesman Nalka Godaheva said Beijing was shying away from restructuring Sri Lanka’s debt as it did not want to set an example. He told reporters that the finance ministry would announce the details of the discussions with China later.
Earlier this month, the government said it was suspending repayment of foreign loans Pending negotiations with the International Monetary Fund for a debt restructuring plan.
Sri Lanka’s debt problems are partly because it used Chinese loans to build infrastructure such as a port, airport and road network, but the projects are not making money.
Rajapaksa had asked Chinese Foreign Minister Wang Yi, who visited Sri Lanka in January, to restructure those loans.
Central Bank figures show that current Chinese debt to Sri Lanka is about $3.38 billion, which does not include loans to state-owned businesses, which are accounted for separately and considered substantial.
