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Loan suspension talks will yield good results: Chinese Ambassador

Ahmed Aiham
21 September 2020, MVT 11:19
Chinese Ambassador to Maldives Zhang Lizhong claimed that ongoing discussions for commercial loan deferment will yield success. PHOTO: NISHAN ALI / MIHAARU
Ahmed Aiham
21 September 2020, MVT 11:19

Chinese Ambassador to Maldives Zhang Lizhong, on Sunday, stated that ongoing negotiations with China, regarding the deferment of commercial loans to Maldives, was expected to yield good results.

Putting an emphasis on the unforeseen setbacks brought forward by the ongoing COVID-19 pandemic, Ambassador Zhang acknowledged the need for a readjusted loan repayment strategy.

Borrowers of commercial loans with sovereign guarantees are mainly state-owned companies as well as one resort island.

"China understands the difficulties facing by the Maldives. And we have already implemented the Group of Twenty (G20) Debt Service Suspension Initiative for the financial official sovereign loans", said the Ambassador.

Ambassador Zhang also encouraged Chinese financial institutions to conduct direct consultations to discuss repayment arrangement with their partners.

"I believe the ongoing dialogue will bring out good results", he concluded.

Earlier in June, President Ibrahim Mohamed Solih stated that China had agreed to partially suspend debt repayment for a period of approximately four years.

He noted that the suspension would be applicable to USD 600 million in loans directly acquired by the government, excluding the loans taken by state-owned companies.

The Chinese government has reduced this year's loan repayment figure for Maldives to USD 75 million as part of the G20 debt relief programme. Maldives was initially scheduled to repay USD 100 million to China.

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