IMF to resume talks on bailout loan after the end of political crisis
Even in the wake of mass uprising, mayhem in governance and uncertainty The International Monetary Fund(IMF) has not given up hopes in extending its assistance to Sri Lanka.
The IMF stated that it was hoping a political crisis will be resolved to resume discussions on a program as President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe decided to resign after historic protest in Colombo.
“We are closely monitoring the ongoing developments in Sri Lanka,” Peter Breuer, IMF Senior Mission Chief for Sri Lanka, and Masahiro Nozaki, IMF Mission Chief for Sri Lanka said in a statement. “We hope for a resolution of the current situation that will allow for resumption of our dialogue on an IMF-supported program, while we plan to continue technical discussions with our counterparts in the Ministry of Finance and Central Bank of Sri Lanka.” The IMF has concluded a round of policy level talk with Prime Minister Ranil Wickremesinghe who is also Finance Minister and there were some fiscal issues to be resolved, while Central Bank Governor Nandalal Weerasinghe said the monetary program targets were wrapped up. An interim budget was also due in July or August.On July 09, protestors overran the Presidential palace, his office and also torched Prime Minister Wickremesinghe’s private residence after police special task force squad guarding suddenly attacked a group of journalist covering protestors. Speaker Mahinda Abeywardena told reporters President Rajapaksa had agreed to step down on July 13 while Prime Minister Wickremesinghe said he will resign as soon as an all party government was ready to take over. Sri Lanka’s inflation topped 50 percent in June after two years of money printing and an attempted float botched with a surrender requirement which sent the rupee sliding to 360 to the US dollar from 200. “We are deeply concerned about the impact of the ongoing economic crisis on the people, particularly the poor and vulnerable groups, and reaffirm our commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies,” the IMF statement said.
The IMF will formally agree to a deal until re-structuring discussions with creditors are initiated but a staff level deal was expected around August 2022.