(Colombo Composite) Sri Lanka rejected a bailout plan for the International Monetary Fund (IMF) on Wednesday. The country should continue to loans, including loan from China to alleviate the worsening economic crisis.
However, after Colombo announced that it was discussing a huge amount of loans with China, the International Credit Institution S & PRE has reduced Sri Lanka's credit rating from CCC+to CCC.
S & P: The risk of default in Sri Lanka's foreign exchange reserves is not risky
Sri Lanka relies on the tourism industry.The influence of other factors affects the national economy. The government's insufficient oil required for funds and the insufficient domestic power supply has triggered many people's livelihood problems.S & P said that the credit rating of Sri Lanka has been reduced by one level, reflecting the deterioration of the country's financial situation, insufficient foreign exchange reserves, and the risk of sovereignty breach risks.
The S & P issued a statement saying: "In view of the external exposure of Sri Lanka, the huge fiscal deficit, the government's large -scale debt and heavy interest burden, the debt repayment in the next 12 months will become increasingly difficult."
Sri Lanka's government bonds are as many as US $ 35 billion (about S $ 47.1 billion), and other international credit rating agencies also warn Sri Lanka's debt defaults.Local and international economists have called on Sri Lanka for help and reorganization of debt, but were rejected by the central bank president Kabrio.
Kaburio said at a press conference in Colombo: "IMF is not universal. At this moment, we have a better alternative choice." He revealed that Sri Lanka is negotiating with China for new loan arrangements with China."China will assist us in paying debts."
China is the largest bilateral credit country in Sri Lanka, and the loan provided accounts for 10 % of Sri Lanka's foreign debt, which does not include Beijing's loan to state -owned enterprises in Sri Lanka.
Chinese Foreign Minister Wang Yi visited a few days ago to discuss debt restructuring with Sri Lanka President Rajapaksa.Kabrio did not disclose the amount of loans to China on Wednesday, but he said that the government is now negotiating a $ 1 billion loan with India to pay a piece of port.
He also said that Colombo will pay a $ 500 million sovereign bond on Tuesday, but the local leaders of the local business community publicly urged him to suspend the money and immediately ask the IMF for help.
In the past, Sri Lanka borrowed a large number of borrowers to build infrastructure, and some of them finally became a white elephant project.Earlier, because of the development of US $ 1.4 billion in loans to China, Sri Lanka was forced to lease the strategic Hangbantota Port to Chinese companies in 2017 for 99 years in 2017.
The United States and India have warned that Handon Tota, which is located in the important international channel of East and West, rented it to China, allowing the Chinese army to get a foothold in the Indian Ocean.
