Sri Lankan Delegation Visits Washington, Seeks $4 Billion As Aid From IMF

The team, led by newly appointed Finance Minister Ali Sabry, expects to start talks with the lender of last resort on April 18 and secure financial aid as early as a week after negotiations

Motorists are queuing up to buy fuel at a petrol station in Colombo. Image: Getty

New Delhi: Sri Lanka, the tiny island nation in the Indian Ocean, is facing the worst financial crisis since its independence.

The country, which is running out of diesel and other essential commodities fast, is witnessing major protests at several corners of the country.

To tackle the situation that was spiralling out of control, a delegation from Sri Lankan is heading to Washington next week looking to secure up to $4 billion from the International Monetary Fund (IMF) and other lenders to help the country for food and fuel imports and limit debt defaults, according to a report by Bloomberg.

The team, led by newly appointed Finance Minister Ali Sabry, expects to start talks with the lender of last resort on April 18 and secure financial aid as early as a week after negotiations.

“We need immediate emergency funding to get Sri Lanka back on track,” Sabry said, while adding that pegging the funding need this year at between $3 billion and $4 billion. “Our appeal to them is to release it as soon as possible.”

According to the report, the finance minister will be joined in the talks by Sri Lanka’s central bank Governor Nandalal Weerasinghe and Treasury Secretary Mahinda Siriwardana, both of whom have had stints with the IMF.

The last time IMF extended help to Sri Lanka in 2016, the loan was capped at $1.5 billion and the programme was prematurely terminated after disbursing $1.3 billion. That was when the economy was growing at about 5 per cent and tourism accounted for a similar per cent of gross domestic product.

In the absence of revenue from tourism, Sri Lanka has times turned to countries, including China and India for support amid a weak foreign-reserves position. It is also in talks with the World Bank and the Asian Development Bank for support, Sabry said.

India has sent help in the form of 40,000 tonnes of rice and a $1 billion line of credit to the country as a part of financial assistance added to a $500 billion line of credit send in February 2022 to buy petroleum products.