Sri Lanka nears getting $2.9 billion loan from IMF

Delegates sent by the International Monetary Fund to Sri Lanka have reached an initial agreement on loaning the country nearly 3 billion dollars amid its deepening economic crisis.

The IMF says the new four-year-long financial program aims to safeguard Sri Lanka’s macroeconomic stability and debt sustainability. The country’s external debt had soared to more than 50 billion dollars at the end of last year.

The IMF’s Senior Mission Chief for Sri Lanka Peter Breuer said, “Staff-level agreement is only the beginning of a long road ahead for Sri Lanka to emerge from the crisis.”

He said it will be important for the country’s authorities to continue on this path with determination.

The agreement is subject to approval by the IMF’s management and Executive Board.

The IMF is urging Sri Lanka to receive assurances from the country’s official creditors and ensure efforts to reach collaborative agreements with private creditors.

Earlier on Tuesday, Sri Lankan President Ranil Wickremesinghe presented to parliament an interim budget, which aims to boost revenue and battle inflation. He said the nation must prepare for at least 25 years of national economic policy.

In April, Sri Lanka announced a suspension of its external debt payments amid a severe economic crisis triggered by dwindling foreign exchange reserves.

People in the country are facing soaring inflation and severe shortages of essential items including food, fuel and medicine.