COLOMBO: Sri Lanka on Tuesday completed its long-delayed foreign debt restructure after the island nation defaulted on its $46 billion external debt in a dramatic 2022 economic crash, a minister told parliament. Its economy has recovered after getting an International Monetary Fund rescue package and imposing austerity reforms aimed at repairing the government’s ruined finances.

“The agreement we have reached today, with announcements from the Singapore and London stock exchanges, is a show of confidence in our government,” Harshana Suriyapperuma, the deputy finance minister, told parliament. Leftist President Anura Kumara Dissanayake’s National People’s Power (NPP) coalition had previously criticized the restructure deal as unfair on the impoverished nation and vowed to renegotiate after coming to power.

But since its win in snap parliamentary elections last month, Dissanayake has made a U-turn, saying the economic recovery was too fragile to jeopardize with any changes. A majority of private creditors to the South Asian nation agreed in September to a 27 percent haircut on their loans. Dissanayake said he would honor a deal secured by his predecessor to restructure $12.55 billion in international sovereign bonds, a key condition to maintain the $2.9 billion four-year IMF bailout loan. The opposition criticized the move, calling it a “lucrative deal” for bond holders, opposition economic spokesman Harsha de Silva said. — AFP