Colombo, Feb 7 (PTI) Sri Lankan President Ranil Wickremesinghe's office said on Tuesday that the Paris Club creditors have agreed to provide the debt-ridden country with financing assurances needed to unlock the USD 2.9 billion IMF bailout package.

Sri Lanka's bilateral creditors Japan, France, Korea, Germany, US, Spain, the Netherlands, Russia, Sweden, Austria, Canada, UK, Denmark, Belgium and Australia are Paris Club members while India, China, Saudi Arabia, Kuwait, Hungary, Iran, Pakistan and Bangladesh are the non-members.

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A statement released by the Paris Club after its meeting held on January 25 said that "to support the implementation of the envisaged IMF supported program and the Sri Lankan authorities' efforts with other official bilateral creditors, Paris Club members jointly with Hungary expressed their full commitment to negotiate with Sri Lanka terms of a restructuring of their eligible claims”.

Wickremesinghe, who took over as the president last year amidst the unprecedented economic crisis and political turmoil, is also holding the finance portfolio.

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The Paris Club assurances came as India had taken the initiative to provide Sri Lanka with financing assurances made mandatory by the IMF to release the USD 2.9 billion bailout package.

However, doubts remain on the level of assurances extended by China, Sri Lanka's largest single creditor.

The US last week said the assurances extended through China's Exim Bank was not what the IMF required to ease Sri Lanka out in the current economic crisis.

The IMF facility after its staff level agreement in September last year has been on hold due to want of assurances from creditors.

The cash-strapped country began negotiating with the IMF for a bailout after having announced its first-ever sovereign debt default in April last year.

Sri Lanka was hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves, sparking political turmoil in the country which led to the ouster of the all-powerful Rajapaksa family.

The IMF in September last year approved Sri Lanka a 2.9 billion dollar bailout package over 4 years pending Sri Lanka's ability to restructure its debt with creditors -- both bilateral and sovereign bond holders.

By the end of June 2022, Sri Lanka owed nearly USD 40 billion to bilateral, multilateral and commercial loans, according to the figures released by the Treasury.

With assurances from creditors, the 2.9 billion dollar facility could get the IMF board approval in March, officials said.

Sri Lanka has introduced painful economic measures such as tax hikes and utility rate hikes. Trade unions and opposition groups have organised protests against such measures.

The IMF facility would enable the island nation to obtain bridging finance from markets and other lending institutions such as the ADB and the World Bank.

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