Sri Lanka will hold a virtual presentation next week to update its commercial creditors and investors following the receipt of IMF Executive Board approval for the bailout package.
The investor and creditor presentation will commence at 8.30 a.m. on March 30, chaired by Central Bank Governor Dr. Nandalal Weerasinghe and Finance Ministry’s Secretary Mahinda Siriwardana.
The Executive Board of the International Monetary Fund (IMF) on March 20 green-lighted a 48-month extended arrangement under the Extended Fund Facility (EFF) program of SDR 2.286 billion (approximately USD 3 billion) for Sri Lanka.
The EFF program will allow Sri Lanka to access financing of up to USD 7 billion from the IMF, International Financial Institutions (IFIs) and multilateral organizations.
After receiving the IMF’s board approval, Sri Lanka immediately received an initial disbursement of USD 333 million (amounting to SDR 254 million) from the EFF arrangement. The first tranche of the IMF bailout package is expected to catalyze new external financing including from the ADB and the World Bank.
The planned presentation will outline the EFF-supported program’s objectives, as well as the next steps with regard to engagement with creditors, the Ministry of Finance, Economic Stabilization & National Policies explained in a press release.
The ministry reiterated that Sri Lanka is fully committed to successfully completing its IMF program, adding that the government has embarked on “an ambitious reform agenda” to ensure fiscal consolidation, boost tax revenues, rebuild its foreign reserves, improve economic governance, and strengthen the Central Bank’s independence.
Sri Lanka will continue to engage with all its creditors in good faith with full transparency and looks forward to constructive discussions for a swift resolution of the public debt situation, the statement read further.
Speaking in this regard, Treasury Secretary Mahinda Siriwardana said: “The IMF Executive Board approval is an important milestone towards Sri Lanka’s debt sustainability and economic recovery, unlocking up to $7 billion in funding from the IMF and other IFIs. These funds will help address Sri Lanka’s macroeconomic challenges, reconstitute financial buffers, and restart the country’s economic growth engines. Moving onto the next phase, we remain committed to progressing engagement with all our creditors to achieve an efficient, transparent, and equitable implementation of the debt treatment required to restore debt sustainability.”
Meanwhile, Governor of the Central Bank of Sri Lanka, Dr. Nandalal Weerasinghe said: “The IMF program is crucial to stabilise our economy and we are strongly committed to successfully complete the IMF program by implementing ambitious reforms. We can already see positive signs of recovery; the headline inflation rate has eased for five consecutive months and our foreign currency reserves have increased to $2.2 billion in February 2023. We are on the right path, but we still have a long way to go. I am confident that we will successfully complete the IMF program and restore Sri Lanka’s economy.”
