Sri Lanka minister says country in talks with China for debt refinancing

Colombo [Sri Lanka], April 26 : After talks with International Monetary Fund (IMF) amid the ongoing economic crisis in the country, Sri Lanka's Mass Media Minister Nalaka Godahewa on Tuesday said that the country is in talks with China as well for refinancing its debt.
"Now that IMF (International Monetary Fund) is ready to cooperate with Sri Lanka, other countries are aware that we have support. We were guaranteed the support of the World Bank and other (financial) agencies," Godahewa said, adding that the negotiations with Beijing are at an early stage, Sputnik reported.
China is Sri Lanka's biggest creditor having provided the Island nation with USD 3.5 billion of credit, the report said citing local media.
Last Tuesday, the Sri Lankan Finance Ministry said the IMF and India pledged assistance to mitigate the economic crisis that has gripped the country.
An IMF official on Tuesday advised Sri Lanka to tighten its monetary policy, raise taxes and adopt flexible exchange rates to overcome its debt crisis, according to media reports.
Sri Lanka is facing one of its worst economic crises resulting in widespread protests against the Rajapaksa family leaders, including President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa.
The recession is attributed to foreign exchange shortages caused by a fall in tourism during the COVID-19 pandemic, as well as reckless economic policies, which have resulted in the country being unable to buy enough fuel, and people facing an acute scarcity of food and basic necessities, heating fuel, and gas.