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IMF Executive Board to decide on Sri Lanka’s US $ 2.9 billion EFF soon

The Executive Board of the International Monetary Fund (IMF) is set to decide on Sri Lanka’s Extended Fund Facility (EFF) at its meeting on 20 March.

IMF Managing Director Kristalina Georgieva had said that she looks forward to presenting for approval Sri Lanka’s IMF-supported program to the IMF Executive Board on March 20. She said the Extended Fund Facility will support the authorities’ program of ambitious reforms.

The Managing Director of the International Monetary Fund (IMF) has welcomed the progress made by the Sri Lankan authorities in taking decisive policy actions and obtaining financial assurances from all major creditors including China, India and the Paris Club.

The arrangement will support the authorities’ program of ambitious reforms, that they have already embarked upon, which will help Sri Lanka emerge from its current crisis and set it on a trajectory of strong and inclusive growth.”

While welcoming the progress made on debt restructuring, the European Union today said that reforms are essential to come out of the crisis stronger.

“As the EU States gave early financing assurances to the Sri Lanka Government, the Delegation of the European Union to Sri Lanka welcomes the progress made on debt restructuring.

Reforms are essential to come out of the crisis stronger. The EU will continue supporting Sri Lankans, including through renewed efforts on social protection,” the EU in Sri Lanka tweeted today

Sri Lanka has closed in on getting a sign-off on the long-awaited bailout package of USD 2.9 billion from the IMF upon receiving fresh financial assurances from China on restructuring the island’s debt.

Addressing the parliament yesterday morning, President Ranil Wickremesinghe said a letter of agreement, signed by him as the finance minister and the Central Bank Governor. Nandalal Weerasinghe, was forwarded to the IMF soon after receiving assurances from the Export-Import (EXIM) Bank of China.

However, the Deputy Ambassador of China to Sri Lanka, Hu Wei officially handed over the financial assurance letter issued by the EXIM Bank of China to Sri Lanka’s Finance Ministry Secretary, Mahinda Siriwardana yesterday at the Presidential Secretariat.

The envoy noted that large-scale Chinese companies are looking forward to visiting Sri Lanka in the near future to explore new investment opportunities.

The objectives of this IMF-supported program are to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential.

“This paves the way for consideration by the IMF’s Board on March 20 the approval of the Staff Level Agreement reached on September 1, 2022 for financing under an Extended Fund Facility,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department (APD) said in a statement.

The IMF says its board’s approval of a new loan for Sri Lanka would help catalyse financing from other creditors, including the World Bank and the Asian Development Bank.

“The arrangement will support the authorities’ program of ambitious reforms that they have already embarked upon, which will help Sri Lanka emerge from its current crisis and set it on a trajectory of strong and inclusive growth,” Srinivasan added.

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