Thursday, April 18, 2024

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Deviating from current IMF path would risk international support: CB Chief

Colombo (LNW): Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe highlighted the government’s flexibility to renegotiate the International Monetary Fund (IMF) programme but underscored the critical condition of adhering to the current path for international support.

This nuance raises concerns about the government’s commitment to necessary reforms and its potential impact on global assistance.

In a press conference, Weerasinghe emphasised that deviating from the established path would result in a lack of international support.

The ongoing renegotiation process within the IMF programme, initiated in September of the previous year, is crucial for determining commitments before disbursing subsequent tranches.

While Weerasinghe mentioned the absence of restrictions for policy changes over the next four years, the overarching imperative is to advance with the current programme to secure international backing.

The CB Chief specifically noted that foreign governments and commercial entities are offering debt relief with the understanding that the programme is progressing.

However, the implication that any alteration to this trajectory could lead to a reevaluation of debt relief decisions raises questions about the government’s commitment to consistent policies.

The backdrop of certain political leaders, including Opposition Leader Sajith Premadasa, expressing intentions to renegotiate the IMF agreement if they come to power adds complexity to the situation.

This dynamic suggests potential shifts in the government’s approach to economic reforms and raises concerns about the stability of the current economic trajectory.

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