The IMF declared that Sri Lanka had agreed to increase its revenue, end subsidies, guarantee the flexibility of its exchange rate, and replenish its foreign reservesthat had dipped to the lowest levels.
Colombo, Sri Lanka: The International Monetary Fund said Thursday it had signed a staff-level agreement to assist the bankrupt Sri Lanka with a $2.9 billion bailout spread across four years.
The world’s lender of last resort contingent on a restructuring plan the country’s $51 billion debts to foreign lenders following the default in April.
“The objectives of Sri Lanka’s new Fund-supported program are to restore macroeconomic stability and debt sustainability,” the IMF stated in a statement following nine days of talks in Colombo.
Relief from Sri Lanka’s lenders and further funding from multilateral partners are necessary to in ensuring debt sustainability and closing funding gaps,” the statement added.
“Financing assurances to restore debt sustainability from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors are crucial before the IMF can provide financial support.”
The IMF stated that Sri Lanka had agreed to increase its revenue, end subsidies, guarantee an exchange rate that is flexible and replenish its reserves of foreign currency which had hit low levels.
Sri Lanka’s astonished economic situation provoked protests on the streets that resulted in the removal of the president Gotabaya Rajapaksa in July.
The country of 22 million is suffering from shortages of food and fuel, as well as suffering from long power cuts and an escalating rate of inflation since late the year.