The International Monetary Fund engaged in “fruitful” initial technical discussions with Sri Lanka about the nation’s request for a loan, and welcomed the nation’s decision to talk with its creditors, the institution said.

“The IMF team will support Sri Lanka’s efforts to overcome the current economic crisis by working closely with the authorities on their economic program, and by engaging with all other stakeholders in support of a timely resolution of the crisis,” IMF Sri Lanka mission chief Masahiro Nozaki, said in a statement.

Fund Managing Director Kristalina Georgieva and other senior members of its management met with a Sri Lankan delegation, led by Finance Minister Ali Sabry and central bank Governor Nandalal Weerasinghe, during the IMF and World Bank spring meetings this past week.

Sabry told Bloomberg News on Wednesday that Sri Lanka may take nearly three weeks to appoint advisers to guide an overhaul of its debt, a move seen as key to unlock emergency funds needed to ease its worsening economic crisis.

Sri Lanka is seeking as much as $4 billion this year to help ease shortages of food, fuel and medicines as its foreign reserves dry up and it heads for a default on its international debt. The economic decline in recent weeks has spiraled into a domestic crisis, with protests seeking the ouster of President Gotabaya Rajapaksa turning deadly on Tuesday when police killed at least one person and wounded several others.

The IMF has said its rapid aid depends on progress on debt restructuring, but the lender has declined to comment on what represents adequate steps toward developing a credible debt plan.

Source:
courtesy of BLOOMBERG

by Eric Martin

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