COLOMBO: Sri Lanka’s bailout package can be presented to the International Monetary Fund’s board for approval as soon as the island nation obtains adequate assurances from bilateral creditors and meets remaining requirements, an IMF spokesperson said on Friday.
The island of 22 million people has been battling its worst economic turmoil since independence from Britain in 1948, which has forced it to default on loans and seek a bailout from global lender IMF.
“We welcome the recent statement by the Paris Club to provide financing assurances to Sri Lanka following the assurances provided by India,” the IMF spokesperson told Reuters in a statement.
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“As soon as adequate assurances are obtained and remaining requirements are met, including by the Sri Lankan authorities, the EFF (extended fund facility) arrangement for Sri Lanka can be presented to the IMF’s Executive Board for approval that would unlock much needed external financing.”
The country has been engaging with bilateral creditors including China to secure the necessary financing assurances and also continues to advance on domestic reforms, the IMF added.
On Wednesday, President Ranil Wickremesinghe, who took office in July after Gotabaya Rajapaksa was ousted in a popular uprising, told parliament that he could see a way out of the crisis through economic reforms, which will seal the IMF deal.
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Wickremesinghe also said the country was working with China, its largest bilateral lender to seek assurances supporting a debt restructuring which would help finalise the IMF programme.
“Sri Lanka going beyond March without an IMF programme will be challenging for us.
We have shown how committed we are and the hardships faced by the people can only be justified by an IMF Board approval,“ Sri Lanka State Minister of Finance Shehan Semasinghe told Reuters earlier this week.
“It will bring considerable improvement to Sri Lanka’s economy and hopefully the country will bounce back.
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Without a programme people will lose confidence.“
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