IMF says wants G20 support to strengthen debt restructuring framework

WASHINGTON (Reuters) – The International Monetary Fund said on Thursday it is hoping that G20 finance leaders next week can advance proposals to strengthen a debt restructuring framework for poor countries as default risks rise and demands for easier debt terms increase.

IMF spokesman Gerry Rice told reporters that the Fund will seek support for IMF proposals to strengthen the G20’s debt restructuring framework, which so far has attracted only three participants — Chad, Zambia and Ethiopia.

Among proposals where there could be movement are an immediate standstill of debt service for countries that seek restructurings under the framework and firm timelines for completing those restructurings.

Adopting these provisions would better equip the IMF, World Bank and other institutions to handle what may be increased demand for restructurings, particularly this year after a nearly two year suspension of official bilateral debt service for poor countries expired at the end of 2021.

“It could be, indeed, that we will see an accelerated demand for support, for debt restructuring in the period ahead,” Rice said. “It’s critical that all of the participants — creditors and debtors — play their part as fully as possible.”

Rice added that Sri Lanka has not sought IMF financial assistance, but the Fund stands ready to discuss options for the country to deal with its debt burden. Its president asked China for new debt terms in January.

(Reporting by David Lawder; Editing by Chizu Nomiyama)