IMF Reaffirms Support for Sri Lanka’s Economic Reforms amid New Government’s Commitment
By: Staff Writer
October 06, Colombo (LNW): The International Monetary Fund (IMF) has reaffirmed its support for Sri Lanka, expressing encouragement over the new Government’s dedication to continuing the country’s reform efforts.
“We are encouraged by the authorities’ commitment to continue the reform efforts. The IMF remains a steadfast partner in supporting Sri Lanka and its people and stands ready to assist the country achieve its economic reform goals,” stated Dr. Krishna Srinivasan, Director of the IMF Asia Pacific Department. This came following the conclusion of a three-day visit by an IMF staff team.
Dr. Srinivasan also mentioned that the IMF team will maintain close collaboration with Sri Lanka’s economic team to determine a date for the third review of the IMF-supported program.
During the visit, the IMF engaged in productive discussions with President Dissanayake and Sri Lanka’s economic team, addressing the economic and financial challenges facing the country. Both parties agreed on the importance of safeguarding and building on the gains made to help Sri Lanka recover from the severe economic crisis it faced in 2022.
In addition to meetings with the President, the IMF team met with key figures such as Prime Minister Dr. Harini Amarasuriya, Minister Vijitha Herath, Central Bank Governor Dr. Nandalal Weerasinghe, and Treasury Secretary Mahinda Siriwardana, along with other stakeholders.
The Sri Lankan Government also announced that consultations with the Official Creditor Committee (OCC) and the IMF had been completed regarding the Agreement in Principle (AIP) terms’ compliance with the Comparability of Treatment (CoT) principle.
This follows the AIP reached on 19 September 2024 with international and local holders of International Sovereign Bonds (ISBs).
In a statement, the Treasury confirmed that the OCC had formally validated that the AIP terms align with the CoT principle.
The IMF also confirmed that the AIP terms meet the program parameters under the Extended Fund Facility (EFF) arrangement’s second review macro framework, particularly when considering the restructuring of official claims in line with the agreement reached with the OCC and China Exim Bank in June 2024.
The Government further reaffirmed its commitment to the AIP and the debt targets announced in September, following the Presidential election on 21 September and the formation of the new Government on 25 September. The authorities also expressed their intention to expedite the restructuring of ISBs in line with the agreed terms.
The Sri Lankan Government thanked all its creditors, as well as the IMF and the OCC, for their ongoing support and engagement throughout the process.
