On Friday, Sri Lankan authorities are going to hold talks with international creditors to begin the process of restructuring billions of dollars of its debt and share plans for tackling the island’s worst economic crisis in more than seven decades.

The said restructuring process is crucial for the nation of 22 million to secure final approval for a USD 2.9 billion loan from the International Monetary Fund (IMF) and subsequent financing from other global agencies. These financial resources would help Sri Lanka overcome an acute shortage of food and fuel which sparked sweeping street protests for months this year and led to the ouster of then-President Gotabaya Rajapaksa.

The government has already held preliminary restructuring talks with neighbour India and diplomats based in Colombo. The island nation is focused on trying to get the IMF deal finalised by December.

As of 2021, Sri Lanka’s foreign currency debt was USD 47.3 billion and local-currency debt at USD 53.6 billion. Japan, China and India are its top bilateral creditors. The foreign currency debt includes USD 13 billion in international sovereign bonds held mostly by private creditors, such as asset managers BlackRock and Ashmore.