Tuesday, 19 October 2021

Sri Lanka Asks IMF To Revive Suspended $1.5-Billion Bailout

Pedestrians walk past the International Monetary Fund headquarters' complex in Washington Sunday, May 2, 2010. A senior International Monetary Fund official says the IMF's executive board is meeting in Washington to consider how much aid to grant Athens under a massive rescue loan package.
(AP Photo/Cliff Owen)

COLOMBO: Sri Lanka has appealed to the International Monetary Fund to revive a $1.5-billion bailout suspended during the island nation’s political crisis late last year, the finance ministry said Wednesday.

In October, President Maithripala Sirisena sparked weeks of high political drama, even featuring brawls in parliament, by sacking Ranil Wickremesinghe as prime minister and dissolving the legislature.

Courts and the parliament subsequently held that the president’s actions were unconstitutional and restored the status quo after more than seven weeks of upheaval that alarmed the international community.

The crisis prompted three international credit rating agencies to downgrade Sri Lanka and the IMF to suspend its bailout programme — that began in 2016 — just as it was about to disburse another instalment.

Sri Lanka’s finance ministry said in a statement the request to revive the bailout was made during talks between Finance Minister Mangala Samaraweera and IMF chief Christine Lagarde in Washington on Tuesday.

A Sri Lankan delegation made the request “with a view to stabilising the economy” after the country’s political “disruptions”, it said.

Meanwhile, the IMF said it would send a team to Colombo next month to discuss resuming assistance.

“We discussed the challenging economic environment and the policy priorities for the country,” it said in a statement quoting Lagarde.

“The IMF remains ready to support the Sri Lankan authorities in these endeavours and an IMF team is scheduled to visit Colombo in mid-February to resume program discussions.”

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