India's G20 proposal: Lenders take haircut on loans

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The Centre is drafting a proposal for G20 countries to help debtor nations badly hit by the economic fallout from the pandemic and Ukraine war, by asking lenders including China, the world's largest sovereign creditor, to take a large haircut on loans.

Two government sources told Reuters of the proposal as finance ministers and central bank chiefs from the Group of 20 prepared to meet in Bengaluru next week.

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China's Foreign Affairs Ministry told Reuters on Wednesday, "It is our consistent stance that multilateral financial institutions and commercial creditors, which hold the bulk of the debt of developing countries, should participate in the debt relief efforts." It was unclear whether the Centre's proposal would advocate multilateral lenders taking haircuts.

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