Business & Economy

IMF extends bailout negotiations with Sri Lanka ahead of agreement

Colombo, Aug 31 (EFE).- The International Monetary Fund on Wednesday extended its ongoing negotiations with Sri Lanka to finalize a bailout package amid the ongoing economic crisis in the country, and said that the results of the talks would be released on Thursday.

“The IMF Mission in Colombo has been extended by one day because discussions are still ongoing with the authorities. We plan to conclude the mission and issue a press release on Thursday, Sep. 1,” IMF’s senior mission chiefs for Sri Lanka Peter Breuer and Masahiro Nozaki told reporters.

Sri Lanka had approached the IMF to secure a bailout package while facing the worst economic crisis in its history, partly owing to a foreign currency shortage and the resultant severe shortfall of fuel and basic necessities.

The island nation, whose foreign reserves have dropped to an all-time low of around $1.8 billion, hopes to secure some $4 billion from the IMF that will allow it to restore fiscal balance.

An IMF delegation had visited the island two months ago for a round of negotiations with the Sri Lankan government.

Although the authorities hoped for a positive outcome from the meetings held in mid-June, civil unrest plunged the country into chaos and led to the resignation of former President Gotabaya Rajapaksa in mid-July, putting the agreement on hold.

Parallel to the negotiations with the IMF, in July Sri Lankan authorities said that they were working with the Lazard investment bank and legal advisor firm Clifford Chance to restructure the country’s foreign debt, after it defaulted on payments in April.

The IMF’s decision to extend the talks comes a day after the Sri Lankan government presented an interim budget that hiked the value added taxes and assigned 3 billion rupees (around $824 million) as aid to those affected by the economic crisis. EFE


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