Foreign Minister Ali Sabry, PC told Indian media yesterday that he is expecting the IMF bailout package of US$ 2.9 billion this month. “We have been in discussion with the IMF [about the package]. The Chinese Government has, in principle told the IMF that they would like Sri Lanka to get the Extended Fund Facility (EFF) and move on with it, but that is not compatible with the IMF requirements.
So we are trying to narrow that gap. And hopefully, they will also come around and we are very hopeful during the month of March, we should be able to unlock the EFF from IMF,” he noted.
He said that the moment the IMF Fund comes in, it brings a lot of creditworthiness to the entire system and confidence. It’s not as if the $2.9 billion per se, given out by the IMF in two to three years time that makes a huge difference on its own. But the fact that Sri Lanka is able to engage IMF and receive the offer means a lot in terms of bringing confidence back to the situation. A lot of other agencies like World Bank, AIIB, ADB, have lined up funds to come in, and Institutes like JIICA, the Japanese agency is there. So IMF is very, very central for us to get the confidence back on track. And then probably, if we have thereafter, if we have a good, understandable debt restructuring session, then our debt becomes more sustainable. And with that, we will probably have access to the capital market once again. That’s the plan, he noted.
Minister Sabry said “So that will now stabilise the economy. We have prevented a catastrophical dive which some other countries have seen, and I think we have managed inflation pretty well from 95% now down to 50%. So that’s a good achievement comparatively from what we were in last year, but for growth to take place, and for recovery to take place, confidence needs to be built and for that the IMF bailout, is very, very central for us”.
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