As reported by economic experts, it will take at least 6-7 months after reaching a staff-level agreement to get International Monetary Fund’s (IMF) support.
However, Central Bank Governor Dr. Nandalal Weerasinghe says that it is expected that the first IMF installment will be received before the end of this year.
An IMF delegation is currently in Sri Lanka holding discussions for a staff-level agreement and according to the relevant discussions, the heads of the Central Bank expect that they will be able to reach a successful agreement by Wednesday (31).
China’s agreement is crucial in obtaining IMF loans and if Sri Lanka manages to secure financial guarantees from external creditors including China, it will speed up the IMF loan relief.
Moreover, Premachandra Athukorala, professor of economics at the Australian National University, apprises that it will not be very successful.
The professor further says that Zambia, an African country, held out a staff-level agreement with the International Monetary Fund in December 2020 to obtain debt relief, and Zambia had to wait until last week to restructure its debt. The professor also mentions that China’s continued refusal to participate in debt restructuring was the cause.
China continues to refuse to restructure the loans given to Sri Lanka and in addition has refused to provide the remaining loan installments that were agreed upon for the ongoing projects.