Sri Lanka, IMF reach preliminary agreement for loan of 2.9 billion dollars

The Sri Lankan government and International Monetary Fund (IMF) have reached a preliminary agreement for a loan of 2.9 billion dollars to support country’s economic policies with 48-month arrangement under Extended Fund Facility.

In a statement, the IMF said that Sri Lanka’s new Fund-supported programme aims to restore macroeconomic stability and debt sustainability. It also safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock growth potential, the statement added.

A senior IMF official Peter Breuer told that the staff level agreement is only the beginning of a long road for Sri Lanka.

According to media reports, the agreement is subject to approval by IMF management and its executive board.

The IMF also requires receiving financing assurances from Sri Lanka’s official creditors, besides ensuring efforts are made to reach a collaborative agreement with private creditors.

Sri Lanka currently faces its worst economic crisis in seventy years, leading to shortages of food, medicine and fuel. The island nation’s worst economic crisis also led to a shortage of foreign exchange that stalled imports of essential items.