Sri Lanka has reportedly reached an agreement with the Official Credit Committee, formed of 17 countries including the US and UK, on debt restructuring as it continues to grapple with an economic crisis.
The agreement established the "main parameters of debt treatment" and aligns with the Extended Fund Facility (EFF) arrangements between Sri Lanka and the IMF - a badly needed bailout loan for Colombo.
The EFF had previously depended on Sri Lanka securing an agreement with its creditors. This arrangement will allow IMF staff to present the first review of Sri Lanka's EFF deal and may potentially lead to the approval of the second disbursement under the arrangement.
The OCC is co-chaired by India, Japan and France (who are representatives of the Paris Club). The OCC was established May 9, 2023, in response to Sri Lanka’s economic crisis.
The agreement comes as Sri Lanka continues to struggle with a dire economic crisis that has led to an increase in food insecurity, shortage of essential goods and inflation.
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