The government will e signing an agreement with the World Bank on Friday3 to obtain a loan worth US$ 127 million to support its efforts in combating COVID – 19, Treasury Secretary S. R Attygalle said.
He made this revelation several days after the government failed to raise a 220 million dollar Development Bond.
Treasury Secretary S.R. Attygalle noted that the government has received 500 million dollars of the 1.2 billion dollar loan granted byChina Development Bank and the remaining 700 million dollars tranche is expected soon.
Mr.Attygalle also said that the government will not default its external debt repayments, but instead would seek a moratorium from lenders owing to the current economic impact caused by the COVID – 19 pandemic.
Earlier Wednesday, President Gotabaya Rajapaksa requested the Director-General of the WHO, Tedros Adhenom, to pursue with lenders including the International Monetary Fund (IMF) and the World Bank to grant a debt moratorium for countries grappling with COVID – 19.
The Treasury Secretary said that talks have been held with other multilateral lenders including the Asian Development Bank and the Asian Infrastructure Investment Bank (AIIB) seeking financial assistance.
The AIIB Board of Directors is set to consider Sri Lanka’s proposal this week. Recently, the IMF announced that it is ready to lend USD 1 trillion to countries struggling with the economic impact of the coronavirus.
However the Treasury Secretary said that he is not sure about as to whether the IMF will give that size of support.
Sri Lanka is awaiting for the disbursement of around US$164 million under the IMF’s Extended Fund Facility bringing total disbursements under the arrangement to around US$1.31 billion.
Sri Lanka’s extended arrangement was approved on June 3, 2016, in the amount of about SDR 1.1 billion (US$1.5 billion, or 185 percent of quota in the IMF.
Sri Lanka’s external debt repayments for 2020 are valued at more than USD 4.8 billion, the highest amount to be repaid by the country in a year.
(LI)