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Sri Lanka still owes money for fuel reveals China, as finance discussions commence

China's Ambassador Qi Zhenhong said Sri Lanka still owes Beijing approximately US $390 million for 12 shipments of fuel that were delivered from July to January this year, as discussions began on financial assistance to help overcome the current economic crisis.

Speaking to reporters in Colombo, Qi reportedly said the debt was still outstanding for the 12 shipments, though 7 separate shipments had been paid for.

The debt will add to Sri Lanka’s financial burden, which has seen unprecedented anti-government protests amidst a cost of living crisis. Newly appointed government ministers flew to Washington earlier this month to start discussions with the International Monetary Fund (IMF) over a bailout.

However, Qi told reporters that the face Sri Lanka had gone to the IMF was “sad” and “the debt restructuring definitely will have an impact on future bilateral loans”.

“China has done its best to help Sri Lanka not to default but sadly they went to the IMF and decided to default,” he added.

“We can’t comment now on a possible loan to Sri Lanka,” Qi added.

Meanwhile China’s embassy in Sri Lanka quoted Qi as telling reporters that the idea of a Chinese “debt trap… is only a myth, created and hyped by some foreign media and politicians intentionally”.

See more from the Chinese embassy here, the Daily Mirror here and EconomyNext here.

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