The International Monetary Fund said it would need “adequate guarantees” from Sri Lanka’s creditors for the new program as it prepares to visit Colombo later this month. The aim of the visit is to make progress on a staff-level agreement on an aid package “in the near future” to help the island nation overcome its severe economic crisis, the IMF said on Friday. Staff from the global lender will be in Colombo from August 24 to 31, the IMF said. “Given that Sri Lanka’s public debt is assessed as unsustainable, approval of the Extended Fund Facility by the IMF Executive Board would require adequate assurances from Sri Lanka’s creditors that debt sustainability will be restored,” the IMF said.
Sri Lanka will ask Japan to invite the island’s main creditor states, including China and India, to bilateral debt restructuring talks. The loan package being negotiated with the IMF is worth between $2 billion and $3 billion, according to President Ranil Wickremesinghe, who said he would present an interim budget in September focusing on fiscal consolidation measures agreed with the IMF. The country of 22 million people is facing its worst financial crisis since independence from Britain in 1948, the result of the combined impact of the COVID-19 pandemic and poor management.
Ordinary Sri Lankans have been facing shortages for months amid crippling inflation and a devalued currency, sparking unprecedented mass protests. Thousands stormed the colonial-era presidential residence in the commercial capital of Colombo in early July. Sri Lanka’s total bilateral debt earlier this year was estimated by the IMF at $6.2 billion by the end of 2020. It also has $14 billion in international government bonds.
Read Now :Under Jal Jeevan Mission 64 million water quality tests have been conducted in 4.51 lakh villages
