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International relations

Sri Lanka turns to China rather than IMF to avoid default

Relations with US-led multilateral lender strained by past misadventures

Sri Lanka's government led by President Gotabaya Rajapaksa desperately needs cash to service over $15 billion in foreign debt. (Source photos by Reuters) 

COLOMBO -- Sri Lanka's ultranationalist government looks set to receive a financial lifeline from China rather than an International Monetary Fund bailout to avoid defaulting on foreign debts, affirming the Asian giant as lender of the last resort to the strategically located South Asian island nation.

President Gotabaya Rajapaksa's government desperately needs cash to service over $15 billion dollars owed to foreign creditors. China eased some of the tension earlier this year by injecting $500 million as part of a $1.2 billion syndicated loan from the China Development Bank.

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