Sri Lanka is on the verge of finalizing a debt treatment plan with India and the Paris Club, insiders revealed, indicating a probable moratorium of up to six years with reduced interest rates during repayment. Sources close to negotiations disclosed that discussions are at an advanced stage, hinting at an imminent formal agreement.
The Official Creditor Committee (OCC), comprising 17 countries that have extended loans to Sri Lanka, has been instrumental in facilitating debt restructuring talks, with China participating as an observer. Sri Lanka's engagement with lenders aims to align debt treatment plans with its economic recovery pace, following a default on its nearly US$50 billion external debt in April 2022.

Concurrently, Sri Lanka is poised to receive the next tranche of the International Monetary Fund's assistance, following a staff-level agreement on the second review of its Extended Fund Facility arrangement. IMF officials commended Sri Lanka's progress in implementing reforms, particularly in inflation control, reserve accumulation, and fiscal strengthening.