Sri Lanka’s ongoing debt restructuring process has encountered obstacles in negotiations with private bondholders, while progress continues with bilateral creditors.

According to the Daily Mirror, Chief of Staff of the President, Sagala Ratnayake, revealed that discussions between the government and private bondholders have reached an impasse due to two unresolved issues.

Both parties, guided by their respective consultants, engaged in two rounds of talks this year, exchanging proposals and counter-proposals.

According to the Daily Mirror, Chief of Staff of the President, Sagala Ratnayake said that the International Monetary Fund (IMF) has deemed the government’s proposals as compliant, but the bondholders’ submissions fell short of meeting the necessary criteria.

As a result, four areas of disagreement were initially identified, which were subsequently narrowed down to two critical points.

The Daily Mirror also reported that while negotiations with private bondholders form only one aspect of the comprehensive debt restructuring program, Sri Lanka has made significant headway with other creditors.

According to the Daily Mirror, Chief of Staff of the President, Sagala Ratnayake said that the Official Creditor Committee (OCC), representing bilateral creditors, has engaged in successful rounds of talks. Additionally, fruitful discussions have taken place with China. The next step involves deciding whether to pursue a single agreement with the OCC or individual agreements with each member state.

Sagala Ratnayake assured that Sri Lanka has no issue with its bilateral creditors, and focus now is on finalizing agreements with OCC members.

Regarding sentiments expressed by the IMF, Ratnayake acknowledged that international donors, including the IMF, have recognized Sri Lanka’s recent economic progress.

According to the Daily Mirror, Chief of Staff of the President, Sagala Ratnayake said that the IMF has made it clear that it will stick to its programme