China ‘unhappy’ with Sri Lanka for seeking bailout from IMF

China ‘unhappy’ with Sri Lanka for seeking bailout from IMF

The cash-strapped country needs at least US $4 billion to tide over its mounting economic woes.

China has expressed apprehension over Sri Lanka seeking a bailout package from International Monetary Fund (IMF), saying that such a move would impact ongoing credit talks with Beijing.

“Sri Lanka going to IMF with a short notice has unavoidably impacted the discussion,” China’s envoy to Sri Lanka Qi Zhenhong told reporters in Colombo on Monday, according to Bloomberg.

Qi also said that China was unhappy when Sri Lanka suspended its debt servicing for the first time in its history, adding that discussion with the multilateral lender will affect future bilateral loans.

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

The comments came a day after the Sri Lankan ministers held negotiations with the IMF in Washington, DC.

According to the statement released by the IMF, the Sri Lankan government will be given an interim amount anywhere between $300 million to $600 million which will be spent on purchasing medicines and other essential items.

The global financial institution further said that Sri Lanka will receive a hefty amount from the World Bank over the next four months.

The cash-strapped country needs at least US $4 billion to tide over its mounting economic woes.

On Saturday, India agreed to extend an additional US $500 million credit line to help Sri Lanka import fuel. India has already agreed to defer USD 1.5 billion in import payments that Colombo needs to make to the Asian Clearing Union.

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On Friday, New Delhi has also extended the tenure of a US $400 million swap given in January this year, the Indian High Commission said.

On Saturday, Sri Lankan President Gotabaya Rajapaksa said the crisis-hit country welcomed investments, technology transfers and financing for its sustainability efforts and cooperation for debt restructuring to support the economic recovery during this critical time.

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