Talks with the IMF on Bailout

By Uditha Jayasinghe

COLOMBO (Reuters) – Sri Lanka will engage in detailed discussions with the IMF regarding a $2.9 billion bailout program during the lender’s annual meetings in Washington later this month, according to a cabinet spokesperson.

The delegation will be led by the country’s central bank governor, treasury secretary, and financial advisers to new president Anura Kumara Dissanayake, as stated by minister Vijitha Herath in a news conference.

Dissanayake announced that Sri Lanka would immediately initiate the third review of its bailout program with the IMF. The approval of this review would enable the disbursement of a fourth tranche amounting to approximately $337 million.

An IMF team is set to visit Colombo for three days starting Wednesday to engage with Dissanayake’s administration regarding the latest economic developments and the reforms supported by the IMF.

Herath noted that there should be an evaluation of the IMF program, although it will not take place during the delegation’s visit this week, which he characterized as a “courtesy call.”

The annual meetings of the IMF and World Bank are scheduled for October 21-26.

In September, millions of Sri Lankans voted for leftist leader Dissanayake, marking the first presidential election since an economic crisis struck in 2022. Citizens are hopeful about his commitment to tackle corruption and support economic recovery.

Investors remain cautious regarding Dissanayake’s intentions to revise the IMF bailout terms, which could potentially postpone future financial aid. However, concerns have been soothed somewhat by the new president’s assurance that the program will proceed under his administration.