Sri Lanka’s central bank unveiled a far-reaching debt restructuring plan on Thursday aimed at restoring stability after an unprecedented economic crisis last year that led to the toppling of then-presidentGotabaya Rajapaksa.
The move comes after Colombo cut subsidies, doubled taxes and promised to privatise hundreds of state enterprises under a $2.9 billionIMF bailoutagreed in March.
That agreement requires Sri Lanka to reduce its debt servicing by two-thirds in the next four years to balance its books and restore the bankrupt island nation’s finances.
Bilateral lenders were spared but will be asked to extend the maturity of their loans up to 15 years at an annual fixed interest rate of 1.5 percent, with a nine-year moratorium on interest payments.