Sri Lanka says it has reached an agreement with China's EXIM Bank on debt, clearing IMF funding snag

Sri Lanka has reached an agreement with China's Exim Bank covering a $4.2-billion debt repayment. This removes a major obstacle to getting more International Monetary Fund (IMF) funding to tide over further default threats. 

The second installment of a $2.9-billion package from IMF was stuck on the pending repayments to Chinese creditors.

The Sri Lankan Finance Ministry said in a statement on Wednesday that the deal with the creditor was a major step in guiding the national economic recovery, a report from the Associated Press said. 

The statement said the deal allows Colombo more space to implement its economic reform agenda.