IMF update on agreements with Sri Lanka’s commercial creditors
News Wire April 5, 2024
The International Monetary Fund (IMF) says there is a strong expectation that agreements with commercial creditors consistent with program parameters will be reached by the completion of Sri Lanka’s second review.
Addressing the IMF’s press briefing, Director of the Communications Department Julie Kozak said the next steps on the debt restructuring are to conclude the negotiations with external commercial creditors and to implement agreements in principle with official creditors.
Julie Kozak further said that the domestic debt operations part of the debt restructuring, are largely completed.
“On December 12, 2023, the IMF’s Executive Board approved the first review of Sri Lanka’s program with the IMF. It enabled a disbursement of US$337 million. On March 21, the IMF Staff and the Sri Lankan authorities reached a Staff-Level Agreement on economic policies to conclude the second review, as well as the 2024 Article IV Consultation.
“Completion of the review by the Executive Board requires, first, the implementation of the prior actions that have been agreed and second, completion of what we call financing assurances review. That review would need to confirm that multilateral partners are continuing their financing contributions to Sri Lanka, and it will also assess progress with debt restructuring and will need to conclude that adequate progress is being made,” she said.
Julie Kozak also pointed out that macroeconomic policy reforms in Sri Lanka are starting to bear fruit.
“Commendable outcomes include rapid disinflation, robust reserve accumulation, and initial signs of economic growth while preserving the stability of the financial system. Public finances have strengthened following substantial fiscal reforms, and it is critical that this reform momentum be continued,” she added.
Julie Kozak made the remarks in response to a question raised regarding an update on the debt restructuring process, including with China state creditors. (NewsWire)⍐
