China urges IMF to provide assistance to Sri Lanka urgently

The statement from China came after the Paris Club of creditors joined India in formally supporting debt restructuring for Sri Lanka, bolstering the bankrupt nation’s efforts to unlock a $2.9 billion bailout from the IMF. China said it wanted multilateral lenders to provide debt relief to Sri Lanka as part of a broader restructuring of loans, a demand at odds with other major creditors and likely to slow a pact to unlock International Monetary Fund aid. The comments Friday on Sri Lanka echo similar issues around debt negotiations with Zambia, where China is also a major creditor. Beijing’s insistence that multilateral lenders, like the World Bank, restructure their loans to countries struggling to repay is at odds with the usual Paris Club practice. Why are multilateral lenders hesitant to restructuring their loans for countries which are struggling to repay ?