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Economics

IMF Said to Discuss Sri Lanka Loan Approval Even as China Stalls

  • Fund may apply policy on lending into official arrears
  • Sri Lanka hoping to clinch $2.9 billion loan by next month
Lotus Tower and Pettah Floating Market in Colombo, Sri Lanka.

Lotus Tower and Pettah Floating Market in Colombo, Sri Lanka.

Photographer: Jonathan Wijayaratne/Bloomberg

The International Monetary Fund is considering approving Sri Lanka’s bailout even without the formal assurance of debt-restructuring support from China, the nation’s biggest bilateral creditor, according to people familiar with the discussions.

Under a rarely used policy on lending into official arrears, the IMF may consider approving Sri Lanka’s loan because China’s assurance is the only prerequisite missing, according to the people who declined to be identified because the information isn’t public.