Urges financial sector reforms to support credit growth

The International Monetary Fund (IMF) called for targeted reforms in Sri Lanka’s financial sector, highlighting the need to address the systemic weaknesses to support the private sector credit growth and economic recovery.

The IMF asserted that resolving non-performing loans, strengthening governance and oversight of state-owned banks and improving the insolvency and resolution frameworks are important to sustainably revive credit growth and support private sector development.

The IMF also reiterated the need to maintain financial stability through prudent monetary policy, noting that “the Central Bank’s independence should continue to be safeguarded, including by refraining from monetary financing of the budget”.