The International Monetary Fund (IMF) said ‘it has made “significant progress” in talk with Sri Lanka, which has sought the global financial institution’s help to cope with its unprecedented economic crisis.
Outlining its initiation for Sri Lanka’s recovery, the fund said in a statement: “the objective of new IMF supported program would be restore macroeconomic stability and debt sustainability, while protecting the poor and vulnerable safeguarding financial stability, and stepping up structural Reform to address corruption vulnerabilities and unlock Sri Lanka’s is growth potential.”
Sri Lanka is counting on IMF to bail its economy out of crisis, with an Extended Fund Facility. The government is also looking to restructure its piling external debt with the IMF – backed programme. In April 2022, Sri Lanka announced a pre-emptive default on its nearly $50 billion dollars foreign loans, amid a severe dollar crunch stemming from balance of the payment crises.
Sri Lanka is heavily reliant on imports, more so after domestic agriculture production dropped by half after a controversial ban on chemical fertilizers last year.
The country spends about two billon on Essentials import every month. Gross official reserves in March 2022 stood at $1917 million, Central Bank data showed. This includes a currency swap from the People’s Bank from China, for nearly US dollars 1.5 billion, usable only based on certain conditions. Effectively, Sri Lanka has about 500 million at its disposal, accounting for a week’s essential imports roughly, or a month’s fuel imports alone.
With the government unable to pay for fuels imports Sri Lanka is currently experience in acute shortage for petrol, diesel, kerosene as the country comes to a near-standstill.
Prime Minister Ranil Wickremesinghe has warned citizen that the next few months would be “most difficult” amid shortages and record inflation. India, Sri Lanka’s top lender this year, has extended about 3.5 billion assistance by way of currency swaps, credit lines and loan deferment.
However, any further bilateral assistance from India or other partners, appears Cognizant on an IMF program being finalized.
News from Crucial News Global
Featured Image: orfonline.org
💫FOLLOW US FOR MORE UPDATES. ❌WE DO NOT HAVE IRRITATING AND SPAMMY NEWSLETTERS. ✅EVERYTHING IS AND WILL BE FREE FOREVER. SEE YOU AGAIN IN YOUR STORIES AND FEED 🙂
