The Executive Board of the International Monetary Fund (IMF) approved a disbursement of SDR150.5 million (about US$206 million, equivalent to 26 percent of quota) for Sri Lanka under the Rapid Financing Instrument (RFI). 

This emergency support will help address urgent balance-of-payments and fiscal pressures arising from the catastrophic Cyclone Ditwah, which hit the country on November 28, the IMF said in a statement.

The Sri Lankan authorities remain committed to their economic reform program supported by the Extended Fund Facility (EFF). The cyclone hit when the Fifth Review under the EFF was nearing completion. 

Given the time needed to assess the economic impact of the cyclone and examine how IMF-supported program can best support Sri Lanka’s recovery and reconstruction efforts while preserving objectives and policy priorities, the Fifth Review has been deferred. An IMF mission team will visit Sri Lanka in early 2026 to resume discussions.

Following the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:

“Sri Lanka was hit by a catastrophic cyclone, claiming more than 600 lives and affecting millions more. Flooding and landslides have displaced more than 100,000 people, destroyed critical infrastructure, and devastated livelihoods across the country. The disaster has created urgent humanitarian and reconstruction needs, generating significant fiscal pressures and balance-of-payments needs. The emergency financial support provided by the IMF under the RFI will help address these pressures. 

The government responded swiftly with a package of relief measures, supported by strong fiscal overperformance in 2025. The Central Bank of Sri Lanka stands ready to provide liquidity support to the financial system if needed.

While recovery and reconstruction needs will be substantial, the authorities remain committed to maintaining fiscal prudence to safeguard fiscal and debt sustainability. All emergency spending will be executed in full compliance with the Public Financial Management Act and supported by enhanced monitoring and regular public reporting in line with transparency and accountability standards. The Central Bank will continue to refrain from monetary financing of the budget.

The cyclone struck as Sri Lanka is emerging from a deep economic crisis and the IMF-supported reform program under the EFF is bearing fruit. Sustained adherence to the reform agenda has underpinned a robust economic recovery, price stability, substantial revenue-based fiscal consolidation, and progress rebuilding foreign exchange reserves. Nonetheless, the economy remains vulnerable and GDP has not recovered to its pre-crisis level.

“The authorities and IMF team maintain close engagement and will resume discussions at the earliest possible juncture. The IMF stands with the people of Sri Lanka during this difficult time and will continue to support Sri Lanka’s recovery and reconstruction efforts.”