The Ministry of Foreign Affairs of China emphasized that "Sri Lanka faces difficulties and challenges, China feels the same, and has been assisting Sri Lanka's socio -economic development as much as possible."

(Beijing Comprehensive News) On the occasion of Sri Lanka's worst economic crisis in 70 years, the Chinese Ministry of Foreign Affairs confirmed that China's import and export banks have provided debt extension to Sri Lanka.

Reuters reported on Tuesday (January 24) that according to China's letter issued to the Sri Lanka Ministry of Finance on January 19, China Import and Export Bank has provided Sri Lanka for two years of debt extension, and said that it will support Sri Lanka to CongressThe International Monetary Fund obtained a loan of $ 2.9 billion (about 3.8 billion yuan).

The Chinese Ministry of Foreign Affairs confirmed to Reuters on Thursday (January 26), and also emphasized that "Sri Lanka faces difficulties and challenges, China feels the same, and has been assisting Sri Lanka's socio -economic development as much as possible."

Sri Lanka, with a population of nearly 22 million people, announced bankruptcy last year.Due to the almost bottoming and economic collapse of foreign exchange reserves, the island nation located on the Indian Ocean was once in a serious energy and food shortage, which caused the people's grievances. The presidential palace was occupied by the anti -government demonstrators, and President Rajapaksa fled.

India has favored the International Monetary Fund earlier this month, saying that it will be committed to supporting Sri Lanka's financing and debt reduction and exemption.However, Sri Lanka also needs China's support to reach a final agreement with the International Monetary Fund.China and India are Sri Lanka's largest bilateral lenders.

However, a person familiar with the Sri Lanka revealed that China issued a debt delay letter issued by the Ministry of Finance of Sri Lanka may not be enough to allow the International Monetary Fund to immediately approve a huge loan to Sri Lanka.

According to the letter from Reuters, it is mentioned that China Import and Export Bank will extend the debt repayment period in 2022 and 2023 according to the requirements of Sri Lanka as an emergency measure.

The principal and interest of the loan repayment and interest of the loan repayment period

The letter also wrote, "During this period, Sri Lanka will not have to pay the principal and interest of the bank loan", and adds that China's import and export banks hope to speed up the negotiation process with Sri Lanka on medium- and long -term debt benefits.

But the report quoted another Sri Lanka sources saying that Sri Lanka hoped that Beijing would make a clear guarantee in accordance with the way India provided to the International Monetary Fund."Originally expected China to do more ... This is far lower than the requirements and expectations for them."

India said in a letter issued to the International Monetary Fund last week that the financing or debt reduction and exemption provided by Indian import and export banks will be consistent with the recovery of debt sustainability under the plan supported by the International Monetary Fund.

According to data from the International Monetary Fund, as of the end of 2020, Sri Lanka owed US import and export banks of US $ 2.83 billion, accounting for 3.5 % of the country's foreign debt.

China Import and Export Bank is a state -owned policy bank leader directly under the State Council of the State Council and supports China's foreign economic and trade investment development and international economic cooperation.

According to statistics from the China -Africa Institute of Johns Hopkins, Sri Lanka owed $ 7.4 billion in China as of the end of last year, accounting for nearly one -fifth of the Sri Lanka public debt.

According to Reuters, a survey by the Global Development Policy Research Center of Boston University in the United States shows that due to the influence of China's reduction of large oil projects, the loan commitment made by China Import and Export Bank and the National Development Bank of China to 100 developing countriesThe amount fell to the lowest level in 13 years in 2021, reaching $ 3.7 billion.

Kevin Gallagher, director of the center, said: "We expect that China's investment will shift a small amount of investment with a small amount and higher quality."