IMF compels Sri Lanka to comply with all of its applicable policies
The International Monetary Fund (IMF) is waiting for Sri Lanka to comply with all the applicable IMF policies before further steps can be taken.
an emailed response to Daily Mirror, Peter Breuer, Senior Mission Chief for Sri Lanka and Masahiro Nozaki, Mission Chief for Sri Lanka, said that on 1st September 1 the IMF reached a staff-level agreement (SLA) with Sri Lanka on a 48-month arrangement under the Extended Fund Facility of about US$2.9 billion.
“The SLA is ad-referendum i.e., subject to IMF Management and IMF Executive Board approval. Once all applicable IMF policies are complied with (including taking prior actions and restoring debt sustainability consistent with program parameters),
IMF management recommends to the IMF Executive Board to approve an IMF arrangement. Once the IMF arrangement is approved, the member will receive financing under in tranches subject to the IMF Executive Board’s regular review of the member’s policy implementation,” the IMF said.
The IMF also said that according to the IMF policies, the Memorandum of Economic and Financial Policies (MEFP), which describes the proposed policy measures in the SLA in detail, will be published shortly after the Board approval of the EFF arrangement.
Peter Breuer and Masahiro Nozaki said that in the interest of transparency, the IMF issued a press release on September 1, and held a press conference on the same day, to disseminate key elements of the SLA.
The Sri Lankan authorities disseminated further details in a presentation to creditors on September 23.
ri Lanka has decided to send a delegation for the annual summit of the International Monetary Fund and the World Bank.
The 2022 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) will take place in person from Monday, October 10, through Sunday, October 16 in the IMF and World Bank Group headquarters, in Washington DC.
Sri Lanka’s delegation will be led by Acting Finance Minister Shehan Semasinghe.
He said the Governor of the Central Bank of Sri Lanka, the Finance Secretary and several others will accompany him.
The Acting Finance Minister said that the 2022 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) will be of paramount importance for Sri Lanka to restructure its debt, and also obtain financial assistance from the IMF.
The recent IMF agreement requires debt restructuring with all external and private creditors.
Although the country is eyeing a December 2022 deadline for the bailout, the debt relief measures throw this timeline into doubt. Japan has been endowed with the responsibility of holding talks with Sri Lanka’s major bilateral creditors such as India and China.
However, the diplomatic coldness between India and China, along with China’s hidden loans and Belt and Road Initiative (BRI) ambitions in Sri Lanka, might dampen the debt restructuring process.