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IMF assistance is uncertain as China provides debt relief to Sri Lanka amid turmoil

China is offering debt relief to Sri Lanka, which is facing a major financial crisis, but the country may still need help from the International Monetary Fund (IMF).

The Sri Lankan government has been negotiating with the IMF for a $1.5 billion loan package to help the island nation cope with its debt crisis. But the IMF has been reluctant to lend money to Sri Lanka until the country implements structural reforms to its economy.

China, however, has offered to provide Sri Lanka with debt relief and financial assistance. The Chinese government has offered to write off part of Sri Lanka’s debt, reduce interest rates on existing loans, and extend the repayment period of its loans.

The Chinese government has also offered to provide additional funds for infrastructure projects in Sri Lanka. China has already invested heavily in Sri Lanka in recent years, and recently announced plans to invest an additional $2 billion in the country.

The Chinese government has also indicated that it is willing to work with the IMF to help Sri Lanka. Chinese Vice Premier Liu He recently said, “China is willing to work with the international community and the IMF to create a win-win situation for the development of Sri Lanka.”

The Chinese government’s offer of debt relief and financial assistance is likely to be welcomed by the Sri Lankan government, which has been struggling to find a way out of its financial crisis. However, it remains to be seen if the Chinese government’s offer will be enough to convince the IMF to provide Sri Lanka with the loan it needs.