New Delhi: The Sri Lankan government under newly sworn-in President Ranil Wickremesinghe and the International Monetary Fund (IMF) have resumed “technical discussions”, Colombo’s finance ministry said Friday.
Sri Lanka is in talks with the IMF to secure a $3 billion bailout package from the financial institution to tide over an economic crisis triggered by the drying up of foreign reserves and what has been described as larger economic mismanagement.
“With the formation of a new government, technical discussions between the Sri Lankan authorities and the IMF have now resumed with a view to finalising the few remaining policy matters that need to be agreed upon prior to reaching a SLA (staff-level agreement),” said the finance ministry in a statement Friday.
The Sri Lankan government will first have to submit a report on debt restructuring to the IMF, to show that the country can balance its needs for funds with the ability to repay its debts.
Then the government needs to come to an SLA with the IMF i.e. an agreement with the IMF’s technical team stationed in the country. The SLA must then be presented to the IMF Board of Directors for approval.
One approved, a comprehensive loan-assistance programme will be prepared for a four-year period.
The finance ministry’s statement comes a week after IMF Managing Director Kristalina Georgieva said the global body hopes to complete the negotiations with Sri Lanka “as quickly as possible”.
A statement from the President’s Office reportedly said Friday that the negotiations with the IMF are currently “highly successful” and so are political negotiations to form an all-party government.
‘Social unrest led to delays’
In its statement, the finance ministry blamed “social unrest” for delaying efforts on the part of the government to make “significant progress” in talks with the IMF.
“Social unrest and political instability, which led to several changes in administration since May, delayed making significant progress towards reaching a SLA,” the statement read.
Experts from top financial and legal firms, Lazard and Clifford Chance — headquartered in the US and UK, respectively — have been flown in to help the government prepare its debt sustainability report.
“The advisers have made considerable progress in the analytical framework for the debt operation…,” the Sri Lankan finance ministry said in its statement.
(Edited by Sunanda Ranjan)
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