IMF to continue monitoring local economic, financial dev. despite 10bn Yuan currency swap

The International Monetary Fund (IMF) which has responded to the 10 billion Yuan currency swap with the People’s Bank of China, said it would continue to monitor the economic policy and financial developments in Sri Lanka.

The IMF said it received a request from Sri Lanka for an emergency financial support to help fight the COVID-19 pandemic, but the assessment of that support had taken longer than for other countries due to Sri Lanka's daunting economic challenges and high public debt.

“So we have sought, but not reached understanding, on how to fulfill the key requirements for what could be a rapid financing instrument which would include policies to continue ensuring debt sustainability to address the balance payment challenges including the COVID‑19 impact on tourism and to preserve international reserves. Indeed, Sri Lanka has relied on important restrictions since last year and recently introduced additional measures such as a requirement to convert 25% of export proceeds. We continue to closely monitor these economic policy and financial developments in Sri Lanka, including the recent agreement for a currency swap with the People's Bank of China,”IMF spokesman said.

The IMF approved the extended Fund programme with the IMF in 2016, which had expired in June 2020.