Sri Lanka has entered into an agreement in principle (AIP) with both the Official Creditors Committee (OCC) and the Export-Import Bank of China (EXIM Bank) for debt restructuring.

The agreement in principle covers approximately US$ 5.9 billion of outstanding public debt and consists of a mix of long-term maturity extension and reduction in interest rates.

The agreed-upon debt treatment terms will be further detailed and formalised in a Memorandum of Understanding (MoU) between Sri Lanka and the OCC, which will then be implemented through bilateral agreements with each OCC member, in accordance with their laws and regulations by June this year .

The CB Governor also noted that negotiations with other external and commercial creditors are continuing expressing expectations that agreements will be reached with them soon.

However, it is still to reach consensus on the debt restructuring with sovereign bond holders, who had lent over US $25 billion before the Sri Lanka declared debt repayment stand still or preemptive default in April 2022.

The government will conclude the MOUs with them and striking a deal on plans of the issuance of new bonds with longer maturity by cancelling previous ones and differ interest rates, he disclosed.