Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva says she is very pleased that IMF staff and Sri Lankan government officials have reached a staff-level agreement to support the country’s economic policies with a 48-month Extended Fund Facility of about US$2.9 billion.

“This is an important step forward for Sri Lanka,” she said in a twitter message on Sunday.

On Thursday, it was announced that IMF staff and the Sri Lankan authorities have reached a staff-level agreement to support Sri Lanka’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about US$2.9 billion.

This was at the end of an IMF mission led by Mr. Peter Breuer and Mr. Masahiro Nozaki who visited Colombo from August 24 to September 1, 2022 to continue discussions on IMF support for Sri Lanka and the authorities’ comprehensive economic reform program.

The objectives of Sri Lanka’s new Fund-supported program are to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential, the IMF said.

However, debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.

Financing assurances to restore debt sustainability from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors are crucial before the IMF can provide financial support to Sri Lanka, it said.