The agreement will be finalized subject to the approval of the IMF’s Management and Executive Board and the fulfillment of conditions by Sri Lanka.
The IMM has sought assurances from Sri Lankan government lenders to secure funding for this loan, while also seeking to reach a cooperative agreement with private lenders.
The IMF said bridging the debt repayment and financing gap would require repayment commitments from Sri Lanka’s creditors and assurances of additional financing from multilateral partners.
Sri Lanka, a small island nation in the Indian Ocean, has faced the worst financial crisis since independence. The country is unable to import essential goods like fuel oil, food and medicine as the foreign exchange reserves are exhausted.
Prices of daily commodities have skyrocketed there; Normal public life has stopped. In this critical situation, the country has asked for an emergency loan of more than 3 billion dollars from the IMF on an urgent basis.
The IMF’s loan program aims to help Sri Lanka in fiscal restructuring, set new prices for energy and electricity, increase social spending, strengthen the autonomy of the central bank and rebuild the country’s foreign reserves.