Japan coordinates with Sri Lankan creditors to resolve debt crisis

japan coordinates with sri lankan creditors

Japan will coordinate with other creditors to resolve Sri Lanka’s deepening financial crisis, Finance Minister Shunichi Suzuki said, urging all creditor nations to gather and discuss the South Asian nation’s debt together.

Suzuki told reporters they were concerned about Sri Lanka’s difficult socio-economic situation.

Sri Lanka must accelerate talks with the International Monetary Fund (IMF) on a bailout. At the same time, all bilateral creditors, including China and India, must gather to discuss the issue, Minister Suzuki said.

Japan is seeking to organize an all creditors’ conference, hoping it could help resolve Sri Lanka’s debt crisis, and it is open to hosting such talks, possibly with China. The country remains unclear whether top creditor China would join, and a lack of clarity remains about Sri Lanka’s finances.

Ranil Wickremesinghe, Sri Lanka’s President, told Reuters this month that Sri Lanka would ask Japan to invite the leading creditor nations to talks on restructuring bilateral debts. President Wickremesinghe said he would discuss the issue with Japanese Prime Minister Fumio Kishida in Tokyo next month.

The island country of 22 million people off India’s southern coast, Sri Lanka, with debt at 114% of annual economic output, is in social and financial upheaval from the impact of the COVID-19 pandemic, runaway inflation, and severely depleted foreign reserves.