IMF Executive Board approves bailout package for Sri Lanka

The Executive Board of the International Monetary Fund (IMF) has approved a bailout package for Sri Lanka.

President Ranil Wickremesinghe welcomed the announcement that the IMF Executive Board, which met today, had approved the Extended Fund Facility for Sri Lanka.

The program approved by the IMF will allow Sri Lanka to access financing of up to US$ 7 billion from the IMF, International Financial Institutions (IFIs) and multilateral organizations.

?In the 75 years of Sri Lanka?s independence, there has never been a more critical period for our economic future. Our official creditors have declared their support following continuous and positive engagements over the last few months, and we are pleased that the IMF Executive Board approved our program, enabling Sri Lanka to access up to US$ 7 billion in funding from the IMF and IFIs. From the very start, we committed to full transparency in all our discussions with financial institutions and with our creditors. I express my gratitude to the IMF and our international partners for their support as we look to get the economy back on track for the long term through prudent fiscal management and our ambitious reform agenda,” the President said.

He said that since taking office last July, it has been his priority to stabilize Sri Lanka?s economy and achieve sustainable levels of debt.

“To do so, we have taken some tough decisions, but we did so with a commitment to widening our social safety nets, protecting the vulnerable, rooting out corruption and ensuring we can grow an inclusive and internationally attractive economy,” he added.

The President said the IMF program is critical to achieving the vision for the country, and the Government is committed to successfully completing the IMF program and achieving debt sustainability.

“We will continue to engage with all our creditors, and I encourage both our bilateral and commercial creditors to strengthen and foster coordination in the context of our forthcoming engagement,” he said.

The President said the IMF program will also be imperative to improving Sri Lanka?s standing in and access to international capital markets, and it will demonstrate that Sri Lanka is once again a country attractive to talent, investors and tourists.

Sri Lanka reached a Staff-Level Agreement with the IMF on a four-year program supported by the Extended Fund Facility on 1st September 2022.

The program, amounting to US$ 3bn, is expected to restore macroeconomic stability and debt sustainability while protecting vulnerable groups and safeguarding Sri Lanka?s financial system.

Since September, the Government of Sri Lanka has held official creditor meetings to update stakeholders on the country?s reform agenda and share information transparently as well as engaging with commercial creditors.

Following the IMF Executive Board approval, the disbursement of the first tranche under this program is expected to take place in the coming days. (Colombo Gazette)