Sri Lanka's new government is carrying out a "mop-up" operation after the last administration left the small Asian country in a "debt-trap," the country's finance minister told CNBC Tuesday.
Speaking from Frankfurt at the Asian Development Bank Conference, Ravi Karunanayake told CNBC that the new government's "biggest problem is from the brought-forward, we're taking stock of what's on. We're basically unearthing what's been off-balance sheet items that have today become a contingent liability and bring that into books."
The Sri Lankan government put on hold several Chinese infrastructure projects : "We were questioning one or two items because a clean government needs to tell the people what it was – but all of those projects are back in full operation. It's a win-win go forward."
Sri Lanka received a $1.5 billion loan from the International Monetary Fund on Friday, which Krystal Tan, an Asia economist at Capital Economics, said in a note over the weekend, "without an IMF loan, Sri Lanka would have been in a precarious position," noting that foreign exchange reserves only covered around 80 percent of short-term external debt.