While Sri Lanka’s debt obligations to China have often been misinterpreted, the fact remains that China is Sri Lanka’s largest bi-lateral creditor. For this very reason, China plays a key role in Sri Lanka’s debt restructuring process. A review of Chinese lending history in the country, particularly its recent offering of direct budgetary financing in 2018 and during the pandemic, also demonstrates China’s understanding of Sri Lanka’s situation and its potential to intervene as a major creditor.
Tag: default
On 12 April 2022, for the first time in its history, Sri Lanka defaulted on its sovereign debt. There are many reasons as to why