Sri Lanka and creditor countries have reached a debt restructuring agreement covering nearly 6 billion dollars. The deal concluded on Wednesday is seen as key to stabilizing the economy of the South Asian country.
Sri Lanka suspended external debt repayments in April 2022. This followed fiscal policy failures and other factors that triggered a sharp depreciation in the country’s currency and a surge in inflation.
Seventeen creditor countries have been in the debt restructuring talks since last year under a framework initiated by Japan, India and France.
The agreement will see Japan and other creditors extend repayment deadlines and cut interest rates. The plan covers about 5.8 billion dollars in debt.