Amidst of the China Stalls IMF said to discuss loan to Sri Lanka…

According to persons familiar with the discussions, the IMF is considering sanctioning Sri Lanka’s bailout even in the absence of a formal guarantee of China’s cooperation for debt restructuring, the country’s largest bilateral creditor.

According to the persons who declined to be named because the information isn’t public, the IMF may take into account authorizing Sri Lanka’s loan under a seldom utilized policy on lending into official arrears because China’s assurance is the only requirement lacking.
This clause aims to prohibit a creditor from denying aid to a nation that is in urgent need of funding and has demonstrated its willingness to adhere to loan terms.

It is too soon to discuss the specific IMF policies that might be used to lend to Sri Lanka, according to an IMF spokesperson, and the government of the country is still looking for financial assurances so that the fund’s executive board will evaluate their request for a loan. The Sri Lankan government is striving to finish up front-loading policy measures, and IMF staff members are still in contact with them, the spokeswoman added.

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