IMF, Sri Lanka reach agreement to release $330 million credit

Colombo, Oct 20 (EFE).- Sri Lankan authorities and a delegation from the International Monetary Fund reached an agreement for the release of $330 million as part of the second tranche of the rescue of some $3 billion the country agreed with the financial entity in March.

“… Authorities remain committed to the ambitious reform agenda under the Extended Fund Facility arrangement and their reform efforts have been commendable, including rapid disinflation and a significant fiscal adjustment expected by the end of this year,” Sri Lanka’s IMF mission head Peter Breuer said Friday in a virtual press conference.

The agreement prepared by the negotiating teams, still subject to approval by the executive management of the fund, will allow the island nation to access some $330 million, as announced in a statement by the international organization.

This amount would raise to $660 million the money received so far by Sri Lanka since the fund approved a bailout of about $3 billion in March intended to help the nation overcome the worst economic crisis in history.

Within the framework of this loan, the fund’s delegation reviewed in recent days that the government was implementing a series of reforms to which both teams agreed to have access to the money.

“Program performance at end-June was satisfactory, with all quantitative performance criteria for end-June met, except the one on expenditure arrears,” Breuer said.

The fund reported that inflation was 1.3 percent in September, compared to the 70 percent it reached in September 2022, saying that Sri Lanka’s international reserves increased by $1.5 billion between March and June and the shortage of basic products had decreased.

Sri Lankan Deputy Finance Minister Shehan Semasinghe said he welcomed the fund’s decision and added that its approval will strengthen confidence in the nation’s economic situation.

“The approval will enable the World Bank, Asian Development Bank and other multilateral financial institutions to disburse remaining installments. The SLA will enhance confidence in our economy and help fast-track debt restructuring resolution with international partners,” he said on his X (formerly Twitter) social media profile.EFE

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