From Rupees to Riches: Sri Lanka's 'We Swear We're Good for It' World Tour

Sri Lanka just struck a deal to restructure about $17.5 billion in external commercial debts. They've been in talks with two main groups: the Ad Hoc Group of Bondholders (AHGB) and the Local Consortium of Sri Lanka (LCSL). These folks hold over half of Sri Lanka's bonds, so getting them on board is a big deal.

Remember back in April 2022 when Sri Lanka had to admit they were broke? That was their first-ever sovereign default. They literally ran out of foreign cash and couldn't pay their bills. Since then, they've been scrambling to get things sorted out.

They've also been chatting with countries like China, India, Franceand Japan to figure out how to pay everyone back. Just recently, they worked out a deal with China Development Bank for another $3.3 billion. This new agreement is supposedly better than what they agreed to back in July 2024, with lower interest payments.

The IMF's still in the picture, offering a $2.9 billion bailout package. But here's the catch - they won't hand over the cash unless Sri Lanka gets its debt situation under control. They've already given out the third chunk of that bailout in mid-June, so things must be moving along.

President Ranil Wickremesinghe has been talking up these developments, saying the country's bankruptcy is officially over. But take that with a grain of salt – with the September 21, 2024 election in mind, he was probably trying to score some political points.

The IMF seems cautiously optimistic, saying Sri Lanka's economic reform program is showing some good results. It's not all smooth sailing yet, but it looks like they're starting to get their financial act together. Baby steps, you know?

#distressed