IMF Assures To Support Debt-Ridden Sri Lanka In Its Efforts To Overcome Economic Crisis

The IMF termed the initial discussions with the delegation led by Sri Lankan Finance Minister Ali Sabry as “fruitful”.

IMF (File Image/Getty)

New Delhi: With Sri Lanka grappling with an unprecedented economic turmoil, the International Monetary Fund (IMF) has assured support to the debt-ridden nation in its efforts to mitigate the current crisis.

The IMF termed the initial discussions with the delegation led by Sri Lankan Finance Minister Ali Sabry as “fruitful”.

Sabry and his delegation, including Central Bank Governor Nandalal Weerasinghe, are currently in Washington, where they held technical discussions for an IMF-supported programme, PTI reported.

The visiting delegation and the IMF team had fruitful technical discussions on the authorities’ request for a programme supported by the international lender.

The IMF in a statement earlier on Saturday said the discussions covered recent economic and financial developments in Sri Lanka, and the need for implementing a credible and coherent strategy to restore macroeconomic stability.

The statement added the IMF team will support Sri Lanka’s efforts to overcome the current economic crisis by working closely with the authorities on their economic programme, and by engaging with all other stakeholders in support of a timely resolution of the crisis.

The Washington-based international lender also welcomed the Sri Lankan government’s plans to hold negotiations with the creditors.

The economic crisis in the island nation is caused in part by a lack of foreign currency, which has meant that Sri Lanka cannot afford to pay for imports of staple foods and fuel, leading to acute shortages and very high prices.

The country needs at least USD 4 billion to tide over its mounting economic woes.

The Finance Minister has been holding talks with the World Bank and nations like China and Japan for financial support.

Earlier on Saturday, India agreed to extend an additional USD 500 million credit line to help Sri Lanka import fuel.

New Delhi has already agreed to defer USD 1.5 billion in import payments that Colombo needs to make to the Asian Clearing Union.

The Indian High Commission said India on Friday has also extended the tenure of a USD 400 million swap given in January this year.

Sri Lankan President Gotabaya Rajapaksa has said that his crisis-hit nation welcomed investments, technology transfers and financing for its sustainability efforts and cooperation for debt restructuring to support the economic recovery during this critical time.

Earlier on April 12, the island nation suspended its debt servicing for the first time in its history.

With Sri Lanka suffering food shortages, soaring fuel prices and major power cuts due to the unprecedented financial crisis, the island nation has been witnessing mass anti-government protests in recent weeks.