Discussions continue to help debt-strapped Sri Lanka

A vice-ministerial-level meeting of three countries jointly chairing discussions between creditor nations working to resolve Sri Lanka’s debt problems has been held in Morocco, according to NHK World.

Japan, India and France say the talks have been making progress, but many challenges remain.NHK has reported quoting Japanese sources that the minister confirmed their intention to work toward Sri Lanka reaching early agreement with its creditors.

Sri Lanka has been facing a rapid weakening of its currency and inflation due to failed financial policies. It has not been able to repay foreign debts since April last year and is effectively in default.

To help the country, Japan and others set up a framework in April this year to discuss issues such as creditor nations changing repayment conditions.The recent meeting was held on Wednesday in Marrakech, where finance ministers and central bank governors of G20 nations will meet.

Creditor nations are considering changes in repayment conditions such as extending deadlines and lowering interest rates.The talks have made some progress but problems remain.

Reaching a final agreement is a major challenge, but how each creditor nation implements any agreement will be another issue as Sri Lanka’s biggest creditor, China, is taking part only as an observer.