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IMF Board to Meet on Sri Lanka’s Rapid Finance Loan on December 19

17 Dec, 2025

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The Executive Board of the International Monetary Fund (IMF) is scheduled to meet on December 19 to consider Sri Lanka’s request for financial assistance under the Rapid Finance Instrument (RFI), according to a notice published on the IMF’s website.

Sri Lanka has sought a loan of USD 200 million under the RFI following the impact of Cyclone Ditwah in late November. The facility provides upfront disbursement and does not require periodic reviews.

Meanwhile, government expenditure in 2026 is expected to increase by at least Rs. 500 billion, significantly altering the fiscal framework underpinning the current IMF programme. An IMF mission is expected to visit Sri Lanka in January 2026 to renegotiate a staff-level agreement in line with the revised fiscal outlook, after a scheduled review earlier this month was deferred.

Recent budget-support loans, including funding approved by the Asian Development Bank, are expected to support foreign reserves or assist with debt repayments. The Central Bank currently supplies foreign currency to the government for debt servicing.

Analysts have noted that Sri Lanka’s ability to build reserves has been constrained amid reduced deflationary policy, despite repayments of government and reserve-related debt. The rupee has also depreciated in 2025, reflecting monetary conditions and central bank dollar purchases.

Sri Lanka defaulted on its external debt in 2022 following aggressive macroeconomic policies, prompting its current engagement with the IMF.

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