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Sri Lanka’s Bailout Slips Further Away as Nation Misses a Leader

  • Political vacuum will probably delay agreement with IMF
  • Country seeking bridge loans from India, Japan, China
Protesters and ordinary people outside the Presidential Secetariat in Colombo, Sri Lanka, on July 10.

Protesters and ordinary people outside the Presidential Secetariat in Colombo, Sri Lanka, on July 10.

Photographer: Jonathan Wijayaratne/Bloomberg

Investors are shifting their focus to Sri Lanka’s bilateral creditors as the resignations of President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe dim prospects for rapid aid from the International Monetary Fund.

Global asset managers predict delays in loan disbursements, with Citigroup Inc. economists forecasting payouts not before early 2023. The concern is that the new administration may cancel Sri Lanka’s existing contracts with legal and financial advisers, setting back the debt negotiations even further, according to people with knowledge of the matter, who asked to stay unidentified as the situation is fluid and changing. Central bank governor Nandalal Weerasinghe is now the most senior policymaker still in his post.