CB Governor waiting for Godot with Jan IMF deadline in doubt
Central Bank Governor Nandalal Weerasinghe will be waiting for Godot as there was no signs of International Monetary Fund’s (IMF) approval for the US $ 2.9 billion bail out loan in January 2023 as well.
Sri Lanka has already missed the Central Bank Governor’s December deadline and it is about to miss his prediction of the January 2023 date of receiving IMF executive board‘s approval for the island nation’s extended fund facility (EFF), official sources said.
Central Bank Governor Nandalal Weerasinghe told a recent media conference if Sri Lanka misses the board approval in December it plans to appear before the IMF Board in January 2023 and is optimistic that it would shortly receive assurance from bilateral creditors including China and India.
The approval for Sri Lanka’s $2.9 billion bailout from the International Monetary Fund (IMF) is likely to go beyond January 2023, State Minister of Finance Shehan Semasinghe said.
Accordingly, the approval of the IMF’s Board of Directors is likely to delay further, despite recent claims that approval would be given in January 2023.
Semasinghe assured, however, that maximum efforts are underway to receive the Board’s approval in the first quarter of 2023.
The bailout was initially expected to be approved by the end of this year, however progress has been slow in recent months.
Sri Lanka will miss the January 2023 deadline for securing an IMF loan, as the main bilateral debtors, China and India were still to give assurance for debt restructuring
Under this setup, Central Bank Governor Nandal Weerasinghe’s assertion of getting IMF executive board approval in January will not become a reality for the second time, several economic experts said.
They noted that Nandalal should not jump the gun like his previous backfiring announcement of preemptive debt default by the country without parliamentary approval.
IMF officials working on Sri Lanka’s bail out loan package have not announced any dead line on its executive Board approval.
Peter Breuer, Senior IMF Mission Chief for Sri Lanka noted that the initial disbursement under the Extended Fund Facility (EFF) is available at board approval, which is contingent on the implementation of prior actions by the authorities and the progress with discussions with creditors on restoring debt sustainability.