In Sri Lanka, Senior Mission Chief of International Monetary Fund Peter Breuer and Deputy Mission Chief Katsiaryna Svirydzenka announced a staff-level agreement with Sri Lankan authorities regarding the second review of the economic reform program. The program, supported by a 4-year Extended Fund Facility (EFF) arrangement, received approval from the IMF Executive Board in March 2023 for a total of SDR 2.3 billion that is equivalent to about US$3 billion.
The agreement, pending approval by IMF management and the Executive Board, hinges on the implementation of prior actions and progress in financing assurance review. Sri Lanka stands to gain access to about US$337 million, adding to the total financial support of SDR 762 million (about US$1 billion) under the arrangement.
The IMF praised Sri Lanka’s reform efforts, noting positive outcomes such as disinflation, reserve accumulation, and economic growth signs. However, sustaining momentum and implementing crucial reforms remain vital for lasting recovery and inclusive growth.
It is worth mentioning that Sri Lanka had defaulted on its external debt commitments in April 2022 during its worst ever economic crisis since its independence. With Indian support of over 4 billion USD, the island nation managed to tackle the crisis which had an acute forex crunch leading to shortages in Food, fuel, medicines and fertiliser among others.