The International Monetary Fund said on Saturday that its staff had had “fruitful technical discussions” with Sri Lankan authorities over the crisis-ridden country’s request for an IMF-backed loan program this week.
The Fund said in a statement that the discussions included the need for Sri Lanka to implement “a credible and coherent strategy” to restore macroeconomic stability, strengthen its social safety net and protect the poor and vulnerable during the current crisis. .
“The IMF team welcomed the authorities’ plan to engage in a collaborative dialogue with their creditors,” IMF mission chief in Sri Lanka Masahiro Nozaki said in a statement.
The indebted island nation of 22 million people is struggling to pay for its imports after a sharp drop in foreign exchange reserves helped fuel soaring inflation. Prolonged power outages and shortages of fuel and medicine have sparked protests across the country.
Sri Lankan Finance Minister Ali Sabry and new central bank governor P. Nandalal Weerasinghe spent this week in Washington to discuss with the IMF, World Bank, India and other countries on financial aid to the country, which is already struggling with $51 billion in foreign investment. debt.
Sabry told reporters on Friday that talks with the Fund were focused on a more traditional expanded funding facility program, but that $3 billion to $4 billion in bridge funding was needed while that could be finalized.
The IMF has said Sri Lanka’s debt must be placed on a sustainable path before it can provide new loans to Colombo – a process that could require lengthy negotiations with China and the country’s other creditors.
Sabry said on Friday that Sri Lanka was discussing with India bridge financing of around $1.5 billion to help continue essential imports, and was discussing a $500 million package with the World Bank. to help provide cash transfers to the country’s poor.
Sri Lanka has also approached China, Japan and the Asian Development Bank for help, he said.
(Reporting by David Lawder; Editing by Daniel Wallis and Leslie Adler)
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)