Jan 23 (Reuters) – India has dedicated to assist ease the debt burden of its crisis-stricken neighbor Sri Lanka as a part of a attainable International Monetary Fund-supported program, the IMF mentioned on Monday.

The island nation of twenty-two million folks has grappled with challenges throughout the previous yr starting from a scarcity of overseas foreign money to runaway inflation and a steep recession – the worst such disaster since independence from Britain in 1948.

Reuters reported final week that India had advised the IMF it strongly helps Sri Lanka’s debt restructuring plan because the island seeks a $2.9 billion mortgage from the worldwide lender, according to a letter.

“Sri Lanka is engaged with other official bilateral creditors to obtain similar assurances,” an IMF spokesperson mentioned in an announcement on Monday.

“As soon as adequate assurances are obtained and remaining requirements are met, including by the Sri Lankan authorities, a Fund-supported program for Sri Lanka can be presented to the IMF’s Executive Board for approval that would unlock much needed financing.”

Sri Lanka requires the backing of China and India – its greatest bilateral lenders – to achieve a ultimate settlement with the IMF that’s important to assist the nation emerge from its worst monetary disaster in seven many years.

Reporting by Andrea Shalal and Ismail Shakil; writing by Costas Pitas; enhancing by Tim Ahmann and Sandra Maler

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