IMF agrees to provide $2.9 billion to crisis-hit Sri Lanka

COLOMBO, Sri Lanka (AP) — The International Monetary Fund announced Thursday that it has reached a staff-level agreement with Sri Lanka to provide $2.9 billion over four years to help rescue the country from its economic crisis.

An IMF team visiting Sri Lanka said in a statement that the preliminary agreement is subject to the approval of the agency’s management and board « subject to implementation by the authorities of prior actions, and receipt of assurances of financing from official creditors of Sri Lanka and making a good faith effort to reach a collaborative agreement with private creditors.

Sri Lanka is facing its worst economic crisis in recent memory with severe shortages of essentials like fuel, medicine and food due to severe shortages of foreign exchange.

The island nation has suspended repayment of nearly $7 billion in foreign debt due for this year. The country’s total external debt stands at over $51 billion, of which $28 billion must be repaid by 2028.

The IMF said Sri Lanka’s economy is expected to contract by 8.7% and inflation has topped 60%.

« In this context, the authorities’ programme, supported by the Fund, would aim to stabilize the economy, protect the livelihoods of the Sri Lankan people and prepare the ground for economic recovery and promote sustainable and inclusive growth. « , did he declare.

Bharata Mallawarachi, Associated Press

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