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Thursday, March 30, 2023

Ranil wants IMF assistance by September  – The Morning

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  • Says IMF essential to obtain bridge financing from other lenders
  • Notes he requested IMF MD to expedite process via phone call 


By Imesh Ranasinghe

Prime Minister Ranil Wickremesinghe wants to enter into an agreement for an International Monetary Fund (IMF) programme to acquire the required bridging finance from other countries by September at the latest.

Speaking yesterday (8) in Parliament, Wickremesinghe said that in a telephone conversation with IMF Managing Director Kristalina Georgieva, he had requested that the process to provide IMF assistance to Sri Lanka be expedited.

“I requested help to expedite this process because we need the bridging finance; to get the bridging finance we need both our agreement with the IMF, and also an arrangement with regard to a debt restructuring plan,” the Prime Minister said.

He said that the IMF Managing Director had promised to revert to him with a positive response to the request.

Further, a statement issued by the Prime Minister’s office said that the Prime Minister had explained to Georgieva that negotiations regarding bridging finance were reliant on Sri Lanka and the IMF concluding a staff-level agreement.

The IMF conducted a virtual mission with the Sri Lankan authorities during 9-24 May on an economic programme that could be supported by an IMF lending arrangement. 

“The IMF team held technical discussions on a comprehensive reform package to restore macroeconomic stability and debt sustainability. The team made good progress in assessing the economic situation and in identifying policy priorities to be taken going forward. The discussions focused on restoring fiscal sustainability while protecting the vulnerable and poor; ensuring the credibility of the monetary policy and exchange rate regimes; preserving financial sector stability, and structural reforms to enhance growth and strengthen governance,” the statement from the IMF said.

In April, former Finance Minister Ali Sabry said to Reuters that Sri Lanka needs about $ 3 billion in bridging finance for a six-month period to function amidst the economic crisis.

Last month, the World Bank rejected reports that it would provide bridging finance to Sri Lanka, “We are concerned for the people of Sri Lanka and are working in co-ordination with the IMF and other development partners in advising on appropriate policies to restore economic stability and broad-based growth. Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka,” a statement from the World Bank read.

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