IMF to work with Sri Lanka's new President on $3 billion loan
- In Reports
- 01:17 PM, Sep 24, 2024
- Myind Staff
The International Monetary Fund (IMF) expressed its interest in working with Sri Lanka's newly elected leftist president. This includes collaborating on the latest review of the country's $3 billion bailout package, according to reports. After Anura Kumara Dissanayake was sworn in as President on Monday, the organisation released a statement saying, "We will discuss the timing of the third review of the IMF-supported program with the new administration as soon as practicable."
Adding further the statement issued by IMF said, “We look forward to working together with President Dissanayake and his team towards building on the hard-won gains that have helped put Sri Lanka on a path to economic recovery since entering one of its worst economic crises in 2022.” During his campaign, Dissanayake pledged to resume talks with the IMF regarding the country's large loan program. With the incredibly unpopular tax increases and spending reductions that accompanied it, voters' top concern was the cost-of-living crisis.
However, reviewing the debt plan carries the risk of postponing further loans from the international organisation. Before receiving funding for the upcoming round, Sri Lanka needs to fulfil several fiscal requirements. Breaking the agreement with the IMF would be a costly error for the economy, according to the country's former president Ranil Wickremesinghe, who mediated the agreement. Before the financial infusion, the country was experiencing an unprecedented economic crisis as skyrocketing inflation destroyed household savings and sparked unrest.
Investors are hoping that Dissanayake will adhere to the loan arrangement. According to Rizvie Salih, a member of the president's coalition party's executive committee, the nation will stick with the program while looking for modifications. The recent bondholder agreement, according to the IMF's statement, "represents significant progress in Sri Lanka's debt restructuring process," but it's still "subject to confirmation on comparability of treatment by Sri Lanka's Official Creditors Committee."
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