G20 host India to propose to China, other creditors to cut debt: Report

Two Indian government sources told Reuters about the proposal that finance ministers and central bank chiefs from the Group of 20 are set to meet in Bengaluru next week. This gathering will be the first major event of the one-year term of the President of India. G-20A bloc made up of the world’s largest economies.

International Monetary Fund (International Monetary Fund) said on Tuesday that it would hold a virtual meeting on Friday with the World Bank, India, China, Saudi Arabia, the United States and other wealthy Group of Seven (G7) democracies to try to reach an understanding on common standards, principles and definitions. Will organize a meeting. How to Restructure Distressed Country Debts.

“India is preparing a proposal” to try to persuade countries like China to make big cuts in lending to nations in difficulty, said an Indian official, both of whom declined to be named because they Was not authorized to speak to the media. ,

China Officials said it and other G20 countries were aware that India was working on a proposal.

China’s foreign ministry told Reuters on Wednesday that it had nothing to share other than comments from spokesman Wang Wenbin at a press conference on Tuesday.

“China takes the debt issue of developing countries seriously and supports relevant financial institutions to resolve it,” he said.

“It has been our consistent position that multilateral financial institutions and commercial creditors, who account for the bulk of developing country debt, should participate in debt relief efforts.”

The People’s Bank of China and the Ministry of Finance did not immediately respond to requests for comment.

India’s finance and foreign ministries did not immediately respond to emails and messages seeking comment.

One of the sources said New Delhi expects the United States to be one of the main supporters of its proposal.

A spokeswoman for the US Treasury declined to comment.

US Treasury officials have previously said they oppose China’s demand that multilateral development banks also cut debt principal in any restructuring. It was not clear whether the Indian proposal would advocate cutting hairs to multilateral lenders.

India’s two neighbours, Pakistan and Sri Lanka, are in economic crisis, and are seeking urgent international help before they run out of foreign exchange to pay for vital imports.

India and the Paris Club of Creditors recently told the IMF that they supported Sri Lanka’s debt restructuring plan as the bankrupt nation sought a loan of $2.9 billion. The United States said earlier this month that it was willing to do its part as well, but “we need to see credible and specific assurances that (China) will meet the IMF standard of debt relief”.

The Export-Import Bank of China has offered Sri Lanka a two-year moratorium on its loans and said it would support the country’s efforts to secure an IMF program, which a Sri Lankan government source said it would Wasn’t enough.

The IMF, the World Bank and the United States have pushed for the so-called Common Framework – a G20 initiative launched in 2020 to help poor countries delay debt repayments – to include middle-income countries. was extended but China has protested.

In December, World Bank President David Malpass said the world’s poorest countries owed $62 billion in annual debt service to bilateral creditors, a 35% year-on-year increase, triggering a higher risk of default. .

The text of this story is published from a wire agency feed without any modification.