Sri Lankan President Ranil Wickremesinghe looks on during an interview with Reuters at the presidential secretariat, amid the country’s economic crisis, in Colombo, Sri Lanka, August 18, 2022. REUTERS/ Dinuka Liyanawate/File Photo
COLOMBO, Sept 7 (Reuters) – The United States will support Sri Lanka’s debt restructuring and provide financing guarantees to the crisis-hit island nation, U.S. Treasury Secretary Janet Yellen said in a letter seen by Reuters.
Struggling to emerge from its worst economic crisis in more than seven decades, Sri Lanka last week reached a preliminary agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion. read more
“The United States, as a creditor, is ready to participate in the restructuring of Sri Lanka’s debt,” Yellen said in a letter dated Tuesday, urging all creditors to cooperate fully in negotiations and restructuring.
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To support Sri Lanka’s negotiations with the IMF, the US Treasury Department will work with other US government agencies, the World Bank and the Asian Development Bank, she added. See the article : US Provides $ 11 Million in Humanitarian and Economic Assistance to Meet Urgent Food Needs in Mauritania Amid Growing Food Crisis | Press release | US Agency for International Development.
Earlier, the Sri Lankan government said the United States would support restructuring efforts.
Sri Lanka’s financial turmoil, its worst since independence from Britain in 1948, stems from economic mismanagement as well as the COVID-19 pandemic that has wiped out its key tourism industry.
Sri Lankans have been struggling for months with acute shortages of fuel and other basic goods, sparking unprecedented protests that have forced a change of government.
The crisis came to a head in July when then-President Gotabaya Rajapaksa, who had been accused of mismanagement, fled the country and resigned, to be replaced by Ranil Wickremesinghe.
The veteran lawmaker has faced an uphill battle to stabilize the economy, however, which has been hammered by annual inflation that now stands at nearly 65%.
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Reporting by Uditha Jayasinghe; Writing by Tanvi Mehta in New Delhi; Editor Clarence Fernandez
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