Sri Lanka crisis | “Require adequate assurances” on Sri Lanka’s debt sustainability restoration: IMF

Sri Lanka has been going through the worst economic crisis since its independence from Britain in 1945, triggering a political crisis as well

Since Sri Lanka’s public debt is assessed as “unsustainable”, the IMF has said that it requires “sufficient assurance” from the country that it will restore debt sustainability during the debt restructuring process, a media report on Friday quoted the global crisis lender as saying.

“The (IMF) team welcomes the appointment of financial and legal advisors to engage in a collaborative dialogue with their creditors. It is an important step towards restoring public debt sustainability,” the EconomyNext website cited the International Monetary Fund as saying after the end of technical level negotiations between the crisis-hit country's officials and the IMF team.

“Since Sri Lanka’s public debt is assessed as unsustainable, approval by the Executive Board of an IMF-supported programme for the country would require adequate assurances that debt sustainability will be restored,” the IMF said.

The global lender's comments come as Sri Lanka's Prime Minister Ranil Wickremesinghe, who is also the finance minister, on Thursday said he would quickly prepare an economic reform programme and seek approval from the IMF.

Mr. Wickremesinghe said: “I have placed my special attention on this because of the present global situation, the war in Ukraine and global inflation. From what we can see, a number of countries may have to face economic problems like ours.”

On Thursday, Mr. Wickremesinghe met the chairmen and top management of all state and private banks in the country and inquired from them issues such as the dollar deficit and credit expansion as well as the amount of savings, media reports said.