The Executive Board of the International Monetary Fund has approved Sri Lanka’s bailout program under an Extended Fund Facility. The package of 2.286 billion special drawing rights equivalent to about 3 billion dollars will be available over 4 years. The Executive Board’s decision will enable an immediate disbursement of 333 million dollars.
With the approval of the much-awaited bailout, Sri Lanka will look to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, and stepping up structural reforms to unlock its growth potential.
Managing Director of IMF Kristalina Georgieva said it is now important for the Sri Lankan authorities and creditors to make swift progress towards restoring debt sustainability consistent with the IMF-supported program. Ms. Georgieva added that Sri Lanka should stay committed to the multi-pronged disinflation strategy to safeguard the credibility of its inflation-targeting regime.
This is Sri Lanka’s 17th credit programme with the IMF. The focus now shifts to debt talks which experts say could take some time. Sri Lanka is going through its worst-ever economic crisis since its independence in 1948, with an acute shortage of foreign exchange reserves. India had provided unprecedented and generous assistance of 4 billion dollars to the island nation to tide over the crisis.