Sri Lanka to start talks with IMF on debt restructuring

Sri Lanka will begin talks with the International Monetary Fund (IMF) next month on a plan to help the crisis-hit country, including assistance with debt restructuring and managing its foreign exchange shortage, three sources said on Friday, Reuters reported.

Finance Minister Basil Rajapaksa will travel to Washington DC in mid-April to present Sri Lanka’s proposal to senior IMF officials, two sources familiar with the ongoing discussions told Reuters.

“We are taking our proposal and a plan,” said one of the sources, speaking on condition of anonymity because the discussions are confidential. “The government is serious about fixing things.”

Sri Lanka is facing its worst financial crisis in years. With foreign exchange reserves standing at $2.31 billion, the country is struggling to pay for essential imports including fuel, food and medicine.

The island nation must repay about $4 billion in foreign debt this year, including a $1 billion international sovereign bond maturing in July.

The decision to approach the IMF for help comes after months of resistance from Sri Lanka’s government and central bank, despite calls from opposition leaders and pundits for a recovery plan. rescue.

“We will discuss options based on our plans,” the source said.

Sri Lanka’s finance ministry and the IMF did not immediately respond to questions from Reuters.