The Washington-based international lender also welcomed the Sri Lankan government’s plans to hold negotiations with creditors.
The Washington-based international lender also welcomed the Sri Lankan government’s plans to hold negotiations with creditors.
The International Monetary Fund (IMF) has pledged support to heavily indebted Sri Lanka in its efforts to stem the current economic crisis, calling initial talks with the delegation, led by the country’s Finance Minister Ali Sabry, “fruitful”.
Sri Lanka has struggled with unprecedented economic turmoil since gaining independence from Britain in 1948.
The crisis is partly caused by a lack of foreign exchange, which has meant that the country cannot afford to import basic necessities and fuel, resulting in acute shortages and very high prices.
Mr. Sabry and his delegation, which included Central Bank Governor Nandalal Weerasinghe, are currently in Washington conducting technical talks for an IMF-backed program.
“The Sri Lankan delegation and IMF team had fruitful technical discussions on the authorities’ call for an IMF-backed programme. The discussions concerned recent economic and financial developments in Sri Lanka and the need to implement a credible and coherent strategy to restore macroeconomic stability,” the IMF said in a statement on Saturday.
Sri Lanka needs at least $4 billion to overcome its mounting economic woes and Mr Sabry has held talks with the World Bank and countries including China and Japan for financial support.
“Going forward, the IMF team will support Sri Lanka’s efforts to emerge from the current economic crisis by working closely with the authorities on its economic program and engaging with all other stakeholders for a timely resolution of the crisis,” the statement said.
The Washington-based international lender also welcomed the Sri Lankan government’s plans to hold negotiations with creditors.
On April 12, Sri Lanka suspended its debt service for the first time in its history.
“The IMF team welcomed the authorities’ plan to engage in cooperative dialogue with their creditors,” it added.
On Saturday, India agreed to provide an additional $500 million credit line to help Sri Lanka import fuel.
India has already agreed to defer $1.5 billion in import payments that Sri Lanka has to make to the Asian Clearing Union.
On Friday, New Delhi also extended the maturity of a $400 million swap granted in January this year, the Indian High Commission said.
On Saturday, Sri Lankan President Gotabaya Rajapaksa said the crisis-hit country welcomes investments, technology transfers and financing for its sustainability efforts and debt restructuring cooperation to support economic recovery at this critical time.
Last week, the Sri Lankan government said it would temporarily default on $35.5 billion in foreign debt as the pandemic and war in Ukraine made it impossible to make payments to foreign creditors.
Sri Lanka has witnessed mass anti-government protests in recent weeks as it suffers from food shortages, soaring fuel prices and major power outages due to the unprecedented financial crisis.
