No talks yet on fresh IMF programme

Colombo, June 5 (Daily Mirror) - As calls emerge from various political quarters for the Government to secure a fresh programme with the International Monetary Fund (IMF) to be implemented after the current bailout package, a spokesperson for the global lender said that Sri Lanka’s engagement for such an initiative is yet a matter to be discussed.

In response to a query whether the Government indicated the need for another programme , an IMF spokesperson told the Daily Mirror that the combined fifth and sixth reviews were just completed under the current Extended Fund Facility (EFF) which even accommodated policy measures in response to the Middle East war.

“We still have two reviews left under the programme. Hence, priority should be to get the current programme to the finish line. Sri Lanka’s engagement with the IMF once the current programme ends is a matter yet to be discussed with the authorities,” the spokesperson said.

Earlier, Opposition Leader Sajith Premadasa urged the Government to immediately begin negotiating a successor programme with the IMF, warning the current arrangement is insufficient to prevent renewed economic distress.

A leading economist, Dr. Ganeshan Wignaraja who is a visiting senior research fellow at ODI Global, London (formerly Overseas Development Institute), and Professorial Fellow at Gateway House, said earlier that Sri Lanka would be compelled to go for another programme with IMF under the circumstances.

The current IMF programme will end in March, next year. Recently, the IMF Executive Board completed the combined fifth and sixth Reviews of Sri Lanka’s economic reform programme supported by the 48-month EFF arrangement. It has provided US $ 695 million for Sri Lanka. Altogether, Sri Lanka has now received about US$2.4 billion under the programme. The IMF has hailed Sri Lanka’s performance under the programme.

The EFF arrangement for Sri Lanka was approved by the Executive Board on March 20, 2023. The arrangement supports Sri Lanka’s reform programme to durably restore macroeconomic stability by restoring fiscal and debt sustainability while protecting the vulnerable, safeguarding price and financial sector stability, rebuilding external buffers, strengthening governance and reducing corruption vulnerabilities and advancing growth-oriented structural reforms.