April 07, Colombo (LNW): President Anura Kumara Dissanayake has indicated that the government is working intensively to secure a staff-level agreement with the International Monetary Fund by Thursday, a move that could unlock two funding tranches worth a combined US$ 700 million before the end of May.
He explained that IMF representatives are currently in the country engaged in ongoing discussions, marking a shift from previous practice where negotiations were typically concluded domestically before being finalised in Washington, D.C.. This time, authorities are aiming to reach a final understanding while talks are still underway locally.
According to the President, successfully concluding the agreement by Thursday (09) would make Sri Lanka eligible to access funds tied to both the fifth and sixth programme reviews, bringing in much-needed foreign currency inflows within weeks.
Beyond IMF support, the government has also been in active dialogue with the Asian Development Bank (ADB). He noted that a recent visit by the bank’s President and delegation resulted in consensus on approximately US$ 1.2 billion in grant assistance expected to be delivered.
Talks have also continued with the World Bank regarding several development initiatives, with further dollar-based funding anticipated.
The President emphasised that, taken together, financial backing from these institutions would significantly ease concerns over a potential foreign exchange shortfall. He pointed out that, in a notable development, the Central Bank of Sri Lanka (CBSL) purchased US$ 700 million from the domestic market during January and February — the first time such a volume has been accumulated in this manner — helping push reserves close to US$ 7 billion.
However, he cautioned that dollar purchases have since slowed, while ongoing external debt servicing obligations continue to exert pressure. As a result, reserves could dip by May compared to the levels recorded at the end of February.
Even so, he maintained that the anticipated IMF disbursement, together with confirmed support from the Asian Development Bank, would place Sri Lanka in a stronger position to manage reserve pressures and maintain financial stability in the months ahead.