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Title: Crisis-hit Sri Lanka plans donor conference with China, India and Japan

Jun 22, 2022 04:11AM ET

By: AnalysisWatch

Sri Lanka's Prime Minister said on Wednesday that amid ongoing talks with the International Monetary Fund (IMF), Sri Lanka will approach China, India, and Japan with an invitation to attend a donor conference to get more foreign aid and find a way out of the deepening economic crisis.

The island nation of 22 million people is struggling with its worst financial crisis in seven decades, unable to import basic necessities including food, fuel, and medicine due to an acute shortage of foreign currency.

Shortages of basic necessities and soaring inflation have stoked public discontent and forced Prime Minister Ranil Wickremesinghe's government to redouble efforts to attract aid from the IMF and friendly countries.

A high-level delegation from India will arrive in Delhi on Thursday for talks on additional aid, and a team from the US Treasury will visit the country next week, Wickremesinghe said.

India has so far provided about $3 billion worth of aid, including a $400 million swap and credit lines totalling $1.5 billion.

Sri Lanka's request to renegotiate the terms of a yuan swap worth $1.5 billion to finance imports of essential goods is being considered by China, which has traditionally battled New Delhi for influence over the Indian Ocean island.

Negotiations with the IMF team, which arrived in Sri Lanka's commercial capital, Colombo, this week, were making progress, with a staff-level agreement likely to be reached with the lender by the end of the month, Wickremesinghe said.

Sri Lanka, which suspended payments on its $12 billion external debt in April, is seeking about $3 billion from the IMF to fix its public finances and access bridge financing.

Wickremesinghe said once an agreement is reached with the IMF, his government will focus on a plan to boost Sri Lanka's exports and stabilise the economy.

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