Colombo, Jun 15 (PTI) Sri Lanka has presented the IMF a roadmap to relax the ban on vehicle imports by 2025, which directly affects foreign exchange reserves, State Minister for Finance Ranjith Siyambalapitiya said on Saturday.
The International Monetary Fund (IMF) in their staff report yesterday while announcing the release of the third tranche of the USD 2.9 billion bailout said, “The authorities have developed an initial roadmap to relax restrictions on the importation of motor vehicles by 2025, starting with public passenger and special purpose vehicles in 2024 Q3, followed by goods transport vehicles in Q4 2024 and the rest in 2025.” Relaxing the import restrictions was a key recommendation of the IMF programme. The staff report said the authorities have relaxed import restrictions apart from motor vehicles.
The removal of remaining restrictions is to be considered after the completion of the ongoing debt restructuring process, it added.
On foreign exchange reserves, the IMF has said it had grown from USD 1.9 billion at the end of December 2022 to USD 4.4 billion by the end of December 2023.
With the outbreak of COVID-19 in 2020, Sri Lanka imposed import restrictions to preserve forex reserves.
The IMF report said Sri Lanka is now committed to developing a plan to remove the remaining restrictions placed on the balance of payment crisis since 2022 when the island announced its first-ever sovereign default.
On Thursday, the IMF disbursed the third tranche of USD 336 million from its USD 2.9 billion bailout package to Sri Lanka, even as it cautioned that the economy of the cash-strapped nation remains vulnerable and the path to debt sustainability is “knife-edged”.
The third tranche under the Extended Fund Facility (EFF) arrangement was released during an executive board meeting of the International Monetary Fund, the Washington-based global lender said in a statement.
With the release of the third tranche amounting to USD 336 million, the total IMF financial support disbursed so far to Sri Lanka under the bailout package is about USD 1 billion, the statement said.
Two tranches of USD 330 million each were released in March and December 2023.
The IMF noted that Sri Lanka’s economy has started recovering, inflation remains low, revenue collection is improving, and reserves continue to accumulate.
However, “despite these positive developments, the economy is still vulnerable and the path to debt sustainability remains knife-edged,” it warned. PTI CORR GSP AKJ GSP
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.