IMF to conclude talks with Sri Lanka this month on possible loan to overcome crisis
The International Monetary Fund (IMF) said on Thursday it was ready to conclude talks with Sri Lanka on the potential support package to help the island nation cope with the dire economic situation. The director of the IMF’s communication department, Gerry Rice, indicated that the technical discussions on the said loan, which began on May 9, will end on May 24, without adding further details. Rice added that the IMF is committed to assisting Sri Lanka “in line with IMF policies, and will engage with stakeholders to support a speedy resolution to the crisis” unfolding in the country.
We are deeply concerned about the current economic crisis in 🇱🇰 Sri Lanka and the hardships suffered by its people. We remain committed to assisting Sri Lanka in line with IMF policies and will engage with stakeholders to support a speedy resolution to the crisis. pic.twitter.com/IZlfzLDCMZ
— Gerry Rice (@IMFSpeakeperson) May 19, 2022
IMF is following developments in Sri Lanka ‘closely’
Shortly after the start of technical discussions on the IMF’s potential loan program in Sri Lanka with the IMF’s virtual mission, the apex financial body said it was monitoring economic and political developments in the country “closely”. torn apart by the crisis. Talks began in April and were then refurbished to form a new government after Mahinda Rajapaksa stepped down as prime minister. Colombo relied on international partners for help as the economic situation deteriorated, pushing the country to the brink of bankruptcy. The island nation is now eagerly awaiting a Rapid Financing Instrument (RFI) as well as a larger Extended Financing Facility (EFF) to help reverse its currency crisis, which is a major contributor to the economic collapse. . At the last meeting, the IMF promised a sum ranging from 300 to 500 million dollars to help Sri Lanka out of the crisis.
Political unrest in Sri Lanka intensifies amid economic crisis
Sri Lanka currently has an outstanding external debt of $51 billion. Following the worst economic crisis in a decade, Colombo said it would suspend foreign loan repayments after its foreign currency reserves fell below $50 million. Sri Lanka must pay off $7 billion in external debt by the end of this year and $25 billion by 2026.
The island nation is struggling to meet the basic needs of its 22 million citizens amid an escalating foreign exchange deficit, which has driven up food and fuel prices and led to gas shortages. According to experts, the economic crisis resulted from manipulation of funds and mismanaged taxation.
Sri Lankan PM says country has enough fuel to last until mid-June
After Sri Lankan parliamentarians instilled fear among citizens over dwindling petrol stocks in the country, new Sri Lankan Prime Minister Ranil Wickremesinghe said the country has enough reserves to last until in mid-June. His remarks came a day after he warned compatriots to avoid queuing outside petrol stations as Sri Lankan petrol stocks dwindled. Echoing his pleas, the country’s energy minister, Kanchana Wijesekera, also said Sri Lanka is on the verge of running out of gasoline and has “no money” to replenish its supplies. .