(LANKAPUVATH | COLOMBO) – The International Monetary Fund (IMF) said it is planning an in-person mission to Sri Lanka in the coming weeks for further discussions on a financial arrangement but emphasized that Sri Lanka needs to take steps to restore debt sustainability before the IMF can move on a financing program.
IMF Director of Communications Gerry Rice at an online media briefing held Thursday said the IMF cannot give an amount or an exact date on finalizing such an agreement.
Responding to media queries about the progress of an IMF financial arrangement for Sri Lanka, the spokesman expressed concern and noted that the island nation is facing very difficult economic conditions and severe balance of payment problems.
“We are deeply concerned about the impact of the ongoing crises and particularly, again the humanitarian concerns, on the impact on the people, particularly the poor and the vulnerable,” Rice said adding that the IMF is monitoring the situation very closely.
He said the IMF is planning an in-person mission to Colombo in the coming weeks to engage on the policy discussions on the program building on the technical discussions that the IMF already held with the authorities on Sri Lanka last month.
Mr. Rice said the timing of a staff level agreement will depend in part on the strength of the policies that the authorities would propose and would commit to.
The spokesman emphasized that since Sri Lanka’s debt was assessed as unsustainable, board approval for any program would require adequate assurances that authorities would take measures to restore debt sustainability before a financial arrangement can be considered.
He emphasized that a staff level agreement would go to the IMF board for approval to make the final decision.
The IMF Spokesman affirmed that Managing Director Kristalina Georgieva spoke to the Sri Lankan Prime Minister Ranil Wickremesinghe on Tuesday and they discussed the IMF’s engagement with Sri Lanka in length. The Managing Director had reaffirmed IMF’s commitment to support Sri Lanka at this very difficult time.
He said the IMF is very concerned about the situation in Sri Lanka and the impact of high global food and energy prices on the people and doing the utmost to help but cannot give a timeline for such help.
“We are engaging as much as we can to see how we can help, but again too early for us to discuss magnitude of a potential financing or a specific date for either the staff level agreement or when this might go to the board,” he said.
He reiterated that when the IMF determines that the country’s debt is not sustainable, the country needs to take steps restore debt sustainability before the IMF can move forward with the financing program.