The International Monetary Fund (IMF) has accorded a USD 1.5 billion loan to Sri Lanka with USD 168 million is transferred as the first Instalment with immediate effect to support the country’s economy.
The Executive Board of the IMF accepted a 36-month extended arrangement under its Extended Fund Facility (EFF) with Sri Lanka for an amount equal to 1.1 billion under special drawing rights
- To meet balance of payments needs arising from external environment and pressures
- To raise revenue through new taxes
- To finance the additional budget spending
- Enables an early disbursement of about USD 168.1 million and remaining will be settled in six installments on quarterly reviews
- To add an additional USD 650 million in other multilateral and bilateral loans, bringing total support to about USD 2.2 billion
Delegate: Min Zhu, Deputy Managing Director and Acting Chair
Points delivered by Min Zhu:
- Sri Lanka’s economy begin to face strain from an external environment and challenging policy adjustments
- The economic agenda, supported by the Extended Fund Facility, provides an important chance to frame macroeconomic policies, address key vulnerabilities, boost reserves, and support stability and resilience
- Sri Lanka’s foreign reserves dropped through 2015 as the central bank spent 200 billion rupees to defend the falling Rupee
- Focus more closely on its key mandate of price stability
- Sri Lanka is expected to rise to international markets for a USD 1.5 billion loan
- IMF’s approval of the Sri Lanka government’s economic reform agenda over the medium term.