Sri Lanka to get access to $337 million from IMF to stabilise economy

The International Monetary Fund (IMF) Executive Board has completed the first review under the 48-month Extended Fund Facility with Sri Lanka, providing the cash-strapped country with access to about $337 million to restore macroeconomic stability and debt sustainability.

The International Monetary Fund (IMF) Executive Board has completed the first review under the 48-month Extended Fund Facility with Sri Lanka, providing the cash-strapped country with access to about $337 million to restore macroeconomic stability and debt sustainability.

Announcing this, Peter Breuer, Senior Mission Chief for Sri Lanka, also said that the debt restructuring with China was concluded on a strictly confidential basis for the IMF to conclude its first review of the $2.9 billion bailout. China holds 52% of Sri Lanka's total debt.

“The Chinese agreement in principle was very good news in Sri Lanka’s debt restructuring talks. We have seen a summary of the key financial terms of the agreement shared by authorities on a strictly confidential basis," Mr. Breuer told reporters on December 12.

The IMF on December 12 concluded the review and approved the release of the second tranche worth $337 million to the island nation, bringing the value of disbursements to $670 million in the four-year facility.

Mr. Breuer said the IMF Executive Board completed the first review under the 48-month Extended Fund Facility with Sri Lanka, providing the country with access to Special Drawing Right (SDR) 254 million (about $337 million). This brings the total IMF financial support disbursed so far to SDR 508 million (about $670 million) out of the total amount of SDR 2.286 billion (about $3 billion).

“The programme continues to support Sri Lanka’s efforts to restore macroeconomic stability and debt sustainability, safeguard financial stability and enhance growth-oriented structural reforms,” the IMF said in a press statement.