Sri Lanka Declares Bankruptcy

Sri Lankan Prime Minister Ranil Wickremesinghe said Tuesday the country is “bankrupt,” making negotiations with the IMF in securing a bailout package “more difficult and complicated.”

“But this time, the situation is different from all those previous occasions. We are now participating in the negotiations as a bankrupt country. Therefore, we have to face a more difficult and complicated situation than in previous negotiations,” Wickremesinghe said.

According to Wickremesinghe, Sri Lanka’s legal and financial experts are currently working on the debt restructuring sustainability for presentation to the International Monetary Fund (IMF) by August.

“The first round of discussions with the IMF has been a success, but the assistance depends on the debt restructuring program, which Sri Lanka has to come up with,” Wickremesinghe said.

In June, an IMF team visited Colombo to discuss economic programs that could be under the IMF lending arrangement.

At that time, the IMF said it had “constructive and productive” discussions with Sri Lankan authorities, however, the country needed to address corruption vulnerabilities before finalizing a bailout package.

According to reports, the total foreign debt of Sri Lanka is 51 billion US dollars.

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