IMF executive board to consider SL’s progress in meeting quantitative targets
By: Staff Writer
Colombo (LNW): Sri Lanka has made “good progress” in meeting quantitative targets in a number of commitments made to the International Monetary Fund (IMF) ahead of its executive board review tomorrow, Central Bank sources claimed.
The government has made good progress in terms of quantitative targets. Except for revenue targets, all targets have been met including inflation, reserves, etc on a quantitative basis,” a senior finance ministry official said.
Structural reforms such as the recently passed central bank act are also being met, he added.
Sri Lanka has made significant progress in its debt restructuring efforts, reaching agreements with domestic and foreign creditors to reduce the country’s unsustainable debt burden.
In July 2023, Sri Lanka completed the restructuring of its domestic debt. The restructuring involved extending the maturities of domestic bonds and reducing interest rates.
Sri Lanka has also made progress in restructuring its external debt, which amounted to around 61% of GDP in 2022. The government has reached agreements with the Paris Club of creditor nations and is in negotiations with private creditors.
Completion of the review by the IMF’s Executive Board requires important matters.The first if the implementation by the authorities of all prior actions; and the second is the completion of financing assurances reviews.
The IMF Executive Board will consider the agreement in principle between the Sri Lankan authorities and their official creditors represented by the Official Creditor Committee (OCC) on a debt treatment by December 12, Foreign Affairs Minister Ali Sabri said today.
He told Parliament that there is a high possibility of Sri Lanka getting the second tranch of the IMF extended fund facility within the next couple of weeks.
The Minister said it was a remarkable international victory that Sri Lanka was able to get the OCC agreement on debt treatment.
The transparency in Sri Lanka’s ongoing International Monetary Fund (IMF) programme improved in November following the publication of several supporting documents with the 2024 budget, according to the latest update of Verité Research’s ‘IMF Tracker’.
The supporting documents have provided information on the progress of six commitments that were previously classified as ‘unknown’. Five of the commitments have now been reclassified as ‘met’ and one – the tax revenue target – as ‘not met’, Verité Research said.
“Of the 73 commitments due by end-November,12 are ‘not met’, 15 are classified as ‘unknown’, and 46 as ‘met’. Therefore, 63% of the commitments due by end November have been verifiably completed. This means, however, that Sri Lanka’s overall performance remains less than impressive, it said.
The IMF board will vote tomorrow (12 December) on the disbursement of the programme’s second tranche of around USD 330 million, which was originally expected in September.
IMF Tracker will be updated with the revised set of commitments and timeframes that are likely to emerge from the request for board approval to disburse the tranche.
