The Paris Club suggests a 10-year suspension of Sri Lankan debt


Sri Lanka: To address Sri Lanka’s financial issue, the Paris Club creditor countries are recommending a 10-year debt moratorium and a subsequent 15-year debt restructuring. Officials from 22 nations work together in the Paris Club to address problems that debtor countries are facing in a sustainable way.

The Paris Club has also urged the nations of the global north and south to accept a comparable haircut in the debt restructuring of Sri Lanka. China or India have not yet received a formal proposal from the Paris club.

The island government has not yet opened a formal engagement with China in the meanwhile. The delay has decreased the likelihood of receiving an extended financial facility from the IMF executive board by the deadline in December. The earliest feasible date for the following IMF meeting is March 2023. Due to the delays, Sri Lanka will need bridging financing until the IMF package is finalised.