IMF, Sri Lanka reach staff-level agreement on second review of bailout package

By Thomson Reuters Mar 21, 2024 | 4:53 AM

By Uditha Jayasinghe

COLOMBO (Reuters) – The International Monetary Fund and Sri Lanka have reached a staff-level agreement on economic policies to conclude the second review of the four-year bailout programme, the global lender said on Thursday.

The review, once approved by the IMF’s board, will release $337 million in funding for the island nation.

The global lender said the South Asian country’s economy was gradually recovering from its worst financial crisis in seven decades that was triggered by a plunge in foreign exchange reserves in 2022.

“Macroeconomic policy reforms are starting to bear fruit,” IMF said in the statement.

“Sustaining the reform momentum and addressing governance weaknesses and corruption vulnerabilities are critical to put the economy on a path towards lasting recovery and stable and inclusive growth.”

Completion of the review requires confirming multilateral partners’ financing contributions and assessing adequate progress with debt restructuring among other requisites, the statement added.

(Reporting by Uditha Jayasinghe, writing by Swati Bhat, editing by Sudipto Ganguly)