IMF To Undertake Sri Lanka’s Bailout Review In September

Sri Lanka is expected to finalise it’s external and internal debt restructuring by September when the IMF will undertake the first review of the $2.9 billion bailout it granted to the country.

Along with the finance minister, the central bank and the ministry of finance will be involved in the review. ( Image Source :Getty )

The International Monetary Fund is expected to conduct the first review of it’s $2.9 billion bailout to Sri Lanka in September. Sri Lanka’s Minister of Finance Ranjith Siyambalapitiya said on Saturday the IMF will be conducting the review from September 11-19, 2023. 

The minister noted that the country has been successful in fulfilling all the nine conditions decided by IMF, reported PTI. Along with the finance minister, the central bank and the ministry of finance will be involved in the review. Sri Lanka is expected to finalise it’s external and internal debt restructuring by next month when the IMF will undertake the first review of the $2.9 billion bailout it granted to the country in March this year. 

Elaborating on the country’s upcoming review, Siyambalapitiya noted, “We had to fulfill nine pre-conditions which we successfully did. The arrangement was for the release of 8 tranches until 2027. About USD 350 million would be made available to Sri Lanka after the September review.”

The report noted that the Sri Lankan government announced a domestic debt restructuring programme in the latter half of June this year, which was criticised by the Opposition. 

Notably, the bailout deal was authorised after pre-conditions for strict reforms including personal tax hikes and increased utility charges in addition to restructuring the country’s loss-making state-owned entities. The report added that national carrier Srilankan Airlines was one of the major state-owned institutions to be privatised under the deal. 

Sri Lanka witnessed the worst economic crisis in it’s history as it’s foreign exchange reserves reduced to a critically low level and the country witnessed mass protests from the public over fuel and essential commodities shortage. Economic mismanagement along with the pandemic aftermath left the country in dire need of economic help.

The IMF bailout marks the 17th bailout for Sri Lanka in it's history, and it’s third since it’s deadly civil war ended in 2009, reported Reuters.