Sri Lanka has concluded debt restructuring talks with Japan and will continue holding such meetings with India this month, President Ranil Wickremesinghe announced on Saturday as the strapped country tries to find a way out of its worst financial crisis.

The crisis-stricken island nation, which is trying to get a 2.9 billion bridging loan from the International Monetary Fund (IMF) Get the bailout.

The IMF bailout has been halted as Sri Lanka continues talks with creditors to meet the global lender’s condition on the facility.

Speaking to unionists here, the President said talks on the debt restructuring with China’s Exim Bank were held this week and further dialogue is ongoing.

The visit of India’s Foreign Minister is expected on January 19 and we will continue to hold talks on India’s debt restructuring, Wickremesinghe said.

His comments came days after Wickremesinghe said India’s response to Sri Lanka’s debt restructuring request was expected by the end of this month.

He had previously said that India and Sri Lanka were holding successful debt restructuring talks and that the country would also start talks with China.

Wickremesinghe stressed that the island state only had a rescue package from the IMF.

The President said he looks forward to the IMF facility in 3-4 tranches.

I want to lift this country out of the abyss sooner, he said.

Sri Lanka began debt restructuring talks with its creditors in September last year, as justified by its agreement with the IMF on the four-year US$2.9 billion facility.

It began negotiations with the IMF for a bailout package after announcing its first-ever sovereign debt default in April last year.

The IMF facility would allow the island nation to receive bridge financing from markets and other lending institutions such as the ADB and the World Bank.

We would then resume several projects that had stalled with Japan by the end of this year, Wickremesinghe said.

He said there were no quick fixes to the current crisis and Sri Lanka must be wary of slowing growth in Europe and the US, which would directly impact the country’s exports.

The President’s meeting with the unions gains importance given the tough economic reform measures to be implemented by the government.

The trade unions are already resisting planned tax increases and increases in electricity tariffs, as well as the privatization of state-owned companies.

The doctors union will observe a black week later this month to protest tax hikes.

Union leaders who attended the meeting said they stressed the need to reach a common understanding of the proposed reforms.

They said they opposed the government’s plan to privatize state-owned companies.

Wickremesinghe recently said he wants to sell state-owned companies to increase reserves. The government has already made clear its plans to privatize Sri Lanka Telecom and Sri Lankan Airlines.

Sri Lanka was hit by an unprecedented financial crisis in 2022, the worst since gaining independence from Britain in 1948, as a lack of foreign exchange reserves sparked political unrest in the country that led to the overthrow of the all-powerful Rajapaksa family.

India extended a much-needed lifeline to a needy neighbor and provided nearly $4 billion in financial assistance to Colombo during the year. In January, India announced a US$900 million loan to Sri Lanka to build up its depleted foreign exchange reserves as the financial crisis unfolded.

It later offered Sri Lanka a $500 million credit line to fund the country’s fuel purchases. The credit line was later expanded to $700 million due to the sheer gravity of the situation.

The Indian credit lines have been used to import basic necessities and fuel since early 2022 after street protests erupted over a severe shortage of basic necessities.

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