China must cooperate with Sri Lanka on debt restructure’

China must cooperate with Sri Lanka on debt restructure’

‘China must cooperate with Sri Lanka on debt restructure’

For Prelims

About United States Agency for International Development (USAID):

  • The United States Agency for International Development is an independent agency of the U.S. federal government.
  • Its primary responsibility is to administer foreign aid and development assistance.
  • USAID works in over 100 countries to Promote Global Health, Support Global Stability, Provide Humanitarian Assistance, Catalyse Innovation and Partnership, Empower Women and Girls and to promote American Interests.
  • USAID has partnered with India to tackle various issues such as food insecurity, fuel the Green Revolution; eradicate polio and strengthen health systems; promote biodiversity and preserve India’s food crops; develop industry and infrastructure; establish leading research universities; develop its economy; and reduce poverty.

About Sovereign Bond:

  • A sovereign bond is a debt instrument issued by the government which can be denominated in both foreign and domestic currency.
  • They promise to pay the bearer a certain amount of interest for a stipulated number of years along with the face value on maturity.
  • Generally sovereign bonds have a lower yield compared to bonds given by corporates; however, they are more desirable to investors due to their higher trustworthiness.

About International Monetary Fund (IMF):

  • International Monetary Fund (IMF) is an international organisation founded on 27 December 1945 at the Bretton Woods Conference.
  • The IMF currently has a strength of 190 member countries.
  • The idea behind the formation of the IMF was propounded by Harry Dexter White and John Maynard Keynes.

How IMF functions

  • The IMF maintains a collective fund which mainly comes from the money that countries pay as their capital subscription (quotas) when they become members.
  • Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy and the degree of its financial security.
  • Countries can then borrow from this pool when they fall into the Balance of Payment Crisis.


Source :  THE HINDU