Sri Lanka has obtained the backing of the Paris Club helping clear a hurdle to unlock a $2.9bn bailout from the IMF, as per Bloomberg sources. The IMF is recently said to have received the assurance from the Paris Club that primarily comprises wealthy, western bilateral creditors. The last major step for Sri Lanka remains, where it needs a similar backing from China before the IMF board can approve the bailout funds. China holds 52% of Sri Lanka’s bilateral debt and therefore is a major bilateral creditor that need to give a clearance after India, another creditor gave its assurances in December.

Sri Lanka’s dollar bonds were higher by up to 0.5 points to trade at over 35 cents on the dollar.

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