COLOMBO: The International Monetary Fund has reported constructive talks with Sri Lankan authorities, raising hopes it could soon grant preliminary approval for a credit facility to alleviate a crisis in which the country is struggling to pay for imports.
“The discussions will continue virtually with a view to reaching a staff-level agreement on the EFF arrangement in the near term,” the IMF said, referring to the credit arrangement, called an extended fund facility. Thursday’s IMF statement followed meetings from June 20-30 in Colombo.
Staff-level agreement must precede final approval by the IMF’s executive board, but so too must cooperation from Sri Lanka’s creditors, which is not expected to come quickly.
The Washington-based lender has said Sri Lanka needs to whittle down existing debt to “sustainable” levels before it can receive any aid.
“Because public debt is assessed as unsustainable, Executive Board approval would require adequate financing assurances from Sri Lanka’s creditors that debt sustainability will be restored,” the IMF said. –Agencies
