Sri Lanka ruled out an IMF bailout today and said it plans to seek another loan from China to address an economic crisis that has led to food and fuel shortages.

       “The IMF is not a magic wand,” central bank Governor Ajith Nivard Cabraal told a news conference in Colombo. “At this point, the other alternatives are better than going to the IMF.” Cabraal added that talks with China over a new loan were at an “advanced stage”, and a fresh agreement would service existing debt to Beijing.

       “They would assist us in making the repayments... the new loan coming from China is in order to cushion our debt repayments to China itself,” he said.

       Cabraal’s remarks come days after a visit from Chinese Foreign Minister Wang Yi who discussed a debt payment restructure with President Gotabaya Rajapaksa. Beijing is already the island’s biggest bilateral lender, accounting for at least 10 per cent of Sri Lanka’s external debt.