Crisis-hit Sri Lanka strikes staff-level pact with IMF on loan

31 August 2022 11:07 am - 34 - {{hitsCtrl.values.hits}}

A A A

Sri Lanka and the International Monetary Fund (IMF) have reached a preliminary agreement on an emergency loan to the crisis-hit country and a formal announcement will be made on Thursday, four sources with direct knowledge of the matter said.

The island nation, struggling with its worst economic crisis in more than seven decades, had sought up to $3 billion from the IMF.

Spokespersons for the IMF and the Sri Lankan government did not immediately respond to requests for comment.

Staff-level agreements are typically subject to the approval of the IMF management and its executive board, after which the recipient nations get access to funds.

A visiting IMF team held talks with Sri Lankan government officials, including the treasury secretary, late into the night on Tuesday to address concerns on the political front, the sources said. Most of the technical details had been agreed to beforehand.

The country of 22 million was plunged into political crisis last month when then president Gotabaya Rajapaksa fled after a popular uprising against an acute shortage of basic goods and sky-high prices.

Rajapaksa was replaced by six-time prime minister Ranil Wickremesinghe, who also heads the finance department and held several rounds of talks with the IMF team. (Reuters)

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 34

Chryshan K Wednesday, 31 August 2022 11:20 AM

Wow great achievement. Now lets go in correct path. IMF will put the things in order.

How is creditor negotitation happening Wednesday, 31 August 2022 11:21 AM

This is a small battle won. It was not unexpected in anyway. Major matter is the 50 or 60 billion plus USD outstanding debt to creditors. And asking creditor to take cut on what's owed to them. IMF 3 billion is paltry compared to what's owed, and so that is far more important to actually get the small amount from IMF for use

Mahila Thursday, 01 September 2022 04:01 AM

Every SMALL step counts in the move to recovery?! SL, if in fact gets IMF BOARD APPROVAL for this acceptance in December, would qualify for an important upgrade, least stabilisation of the CREDIT rating, which is ‘necessary important primary step’, so as other (NEW) lenders by well-meaning friendly countries, look favourably to support Sri Lanka’s future after recovery, in development funds and soft loans which unlike “Chinese Commercial Interest EXIM Bank Loans” at high interest rates?! Very important step in the process –future well-being of the country??!!

Dee Wednesday, 31 August 2022 11:24 AM

This will be a big blow to the hopes of the SJB and SLFP.

S. Samarakoon Wednesday, 31 August 2022 11:32 AM

RW has in him to be a superb President. Needs to get rid of SLPP Thugs soon and pave the way for a UNP Parliament which the Country will endorse..

K L L Fernando Wednesday, 31 August 2022 11:46 AM

A great news and a big relief for Lanka. Can slowly increase the exports and put some restrictions on unnecessary imports for the time being. IMF and EU would have taken into consideration that for this polarized country Ranil is the only person who could bring the reconciliations among all races and the religions and do the justice for all. But he should be careful to have the soft approach at least now onwards towards the Aragala Karuvo as it could affect the process.

Lank Wednesday, 31 August 2022 11:47 AM

We hope IMF does not put some preconditions on this loan and doesn't behave as China does .. We hope now the country has enough foreign reserves to buy enough petrol from now on ..

Cholmondeley Pinto Wednesday, 31 August 2022 09:11 PM

There are preconditions for every loan. No lender will be so stupid to believe any srilankan politician taking into account the past. No more cheating and honesty is the main precondition. Promises have to be kept. Srilankans must change their ways if they expect to get help. No more agreeing to something and doing something else. Enough of politics and put the country and it's economy first.

Ram Wednesday, 31 August 2022 01:12 PM

in my mind we have failed to fulfil IMF conditions and we are unlikely to get any help in the near future

City Wednesday, 31 August 2022 05:19 PM

Are you related to SP (SJB), at least now think positively.

Common sense Wednesday, 31 August 2022 02:43 PM

We have failed to solve the elephant in the room. If the government and 6.9 want to postpone it over and over God help SL.

Ranjith Perera Wednesday, 31 August 2022 03:23 PM

The IMF disbursements for next three to four years is possible only once we agree upon restructuring of our debts with creditors.It is everybody’s guessing what are social and economic cost are going to be . There is hardly any time and space for us now as we are at very bad wicket with creditors.If parameters extend beyond critically needed reforms in the negotiations with creditors economic and social cost is enormous or may be unthinkable during our life time. Stop euphoria and prepare masses for difficult time that is ahead of us. Nobody give money free, we Sri Lankans need to put in a lot of hard and spade works together a lot of patience to endure this crisis.

Mudalali Wednesday, 31 August 2022 03:30 PM

Looking forward to tax hikes (direct and indirect) higher petroleum, gas and energy prices! Not a cent of the profits will remain in Sri Lanka and will be the cause of mass job losses. In one word it's called privatisation. Good luck everyone.

Kala Varen Wednesday, 31 August 2022 03:50 PM

For the 17th time another loan for the super rich and the middle class to bust it up again on their shopping sprees. And then go begging again at the end of the day for another and a another.

Aquarius Wednesday, 31 August 2022 04:00 PM

Lank…. If IMF puts conditions it is for a valid reason. They are not stupid to throw peoples money away on uncontrollable and corrupt countries. There should be good governance, monetary control, small government, human rights, etc. etc.

Jef Wednesday, 31 August 2022 04:14 PM

IMF must have done some kind of staff level process improvent by the government to help in a way sri lanka to lift The head up and gradually thinking we would archive the nessorory within time frame for the full benifit our president have Done something right and should be proud of the same way we must get our house in order to minimize any financial benifits reaching anyone to make their pockets filled strict measures management accountability must be a priority MR president have a tough job a head until the best honest clever educated decent team is build to archive victory and prosperity for our nation Ranil is the only person can archive the results that we all desperately need of...

Reader Wednesday, 31 August 2022 04:57 PM

It is just the start of a long and hard journey. If we keep true to the roadmap we will come out of this in a better position than we went into the crisis and hopefully future generations will benefit out of it.

K. Andersson Wednesday, 31 August 2022 05:06 PM

Hope IMF will supervise and audit every cent of the loan. Extremely corrupted are in every corner waiting like vultures.

Markandu K Wednesday, 31 August 2022 05:21 PM

It shows the fickle Srilankan mentality to admire RW and his achievement. They forget the guy is still protecting and maintaining the same bunch of thieves, including him who caused this miserable situation. There is no fool like a Srilankan fool who looks only for the temporary relief and not worry about the permanent future of the country and its younger generation!

C Fernando Wednesday, 31 August 2022 11:18 PM

Precisely. Suddenly, RW who was a failure on all previous occasions that he held office is now the “only person who can bring Sri Lanka out of its desperate situation”. Really? What was the miracle that turned him from failure to savior??

Mahila Thursday, 01 September 2022 04:22 AM

Clearly reveals the ignorance of the IMF process and acceptance in principle the governments corrective measures in Taxation, interest rates (Control, Lending and inflation) and $ stabilisation with a view to attract more Foreign exchange earning capacity enhancing exports, which is the reason, in contrast to MaRa as Finance Minister and useless misfits as Governor CBSL in mismanaging the Macro-economic principles from November 2019 through May 2022, which caused the precipitation, melt-down and Bankruptcy??!! ALL SHOULD BE COMPLEMENTED ON THIS ACHIEVEMENT, ESPECIALLY RW WITHOUT RESERVATION, PARTY POLITICS APART?!!! NEVER, HESITATE TO ATTRIBUTE TO DEVIL IT’S DUE!!! With MaRa PIPEDREAM?!!

Nihal S Wednesday, 31 August 2022 06:28 PM

The long term solution is not IMF support, but to eliminate corruption and heavy expenditure on the Government side (both are linked) though system improvements. Can RW do that whose survival is dependant on a group of the most corrupted led by Rajapakse?

Sinna Wednesday, 31 August 2022 08:21 PM

Basically what IMF must keep in its mind is local politicians are rogues,their intention is grab lion’s share for personal use,if IMF wants to help people,strict monitoring is paramount

Lumbini Wednesday, 31 August 2022 09:07 PM

Help for the good reason. It is the emergency of an agreement for good governance. If IMF wants this money back in cash, the agreement must include a definite time frame for prompt national elections as no payback is possible in the form of territory.

Aruni Mathugama Thursday, 01 September 2022 02:01 AM

When I look at majority of the comments, I understand the fictitious ideology we believe in. This is not a bailout nor it is a solution that would be followed by a bailout. Under the conditions Sri Lanka faced with today IMF had a soft spot for a small loan facility to support the on going expenses. Without full transparency and stability in politics, a complete bailout would NOT be possible.

Mohan Thursday, 01 September 2022 07:17 AM

Sounds like a great achievement. But it is not. We have only managed to get a loan. That is it. We have to strengthen our economy so that we will never get into a situation like this in the future again.

Andare Thursday, 01 September 2022 07:22 AM

Banana Republic (controlled by Kaputa) is far below and are no where near IMF but making personal high profits from the fool masses. IMF was just an average guide line where the Royal family new it was a waste of time (remember Mr. 10%). But to get there there are much more than the IMF guide lines the masses and asses will have to sacrifice. Until the Master crooks are caught, fined and put the behind bars, the country and people will suffer and will only be a Api Thamai Honthatama Kale bunch of muts to the world. So more than taxing the crooks are to be caught and first put behind bars.

Rukshan P Thursday, 01 September 2022 08:40 AM

Get ready to roll. If you think IMF will hand over 3 billion without strings, think again. Those guys have seen garbage bags full of corrupt politicians from Argentina to Zimbabwe. The conditions will be hard not because they’re mean but because Sri Lanka is like a delinquent alcoholic that must now live within its means. It took Greece nearly a decade to recover from its crisis and the people had to withstand austerities and very hard times. There is no normalcy on the horizon but deep financial pain and necessary structural

Cherath Thursday, 01 September 2022 08:47 AM

A loan is essential to keep Sri Lanka alive. But the critical requirement is to utilise it with maximum control and sensibility. Otherwise, like all the loans and credit lines in the past 12 months, the loan will be consumed with no improvement in the state of the economy. Periodical payment of instalments and the interest plus generation of revenue through development of industrial projects must occur with this loan and savings. Savings will have to happen through limiting imports and boosting exports.

Anura Nanayakkara Thursday, 01 September 2022 08:49 AM

Yes, Ranil Wickramasinghe is the best person to handle this situation in Sri Lanka. He is well experienced handling various problems accordingly , and the most educated with good negotiation skills among all politicians.

Karalasingam Sivalingam Thursday, 01 September 2022 10:25 AM

Beggars are not choosers, have to abide by all conditions imposed, let's bear up the impending price hikes.

Karalasingam Sivalingam Thursday, 01 September 2022 10:25 AM

Beggars are not choosers, have to abide by all conditions imposed, let's bear up the impending price hikes.

sas Thursday, 01 September 2022 10:48 AM

IMF will ask for deep economic reforms which are necessary. The 3 billion Dollars will not flow in to the country at once. They will disburse it in tranches, pending the success of reforms. So far the government has not done any thing specific with regard to debt sustainability and public sector reforms.

emily Thursday, 01 September 2022 02:17 PM

Is SLPP ready to loot part of the IMF money simply divert part of the money to ministers private bank accounts

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Crisis-hit Sri Lanka strikes staff-level pact with IMF on loan

Comments - 34

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Heavy taxes for public, duty free vehicles for MPs, senior officials?

Sri Lanka weighs Open Skies amidst plans for national carrier privatization

Oil and gas exploration halted by prolonged legal dispute

Controversy over foreigners issuing on-arrival visas at BIA

Not AirAsia bidding to acquire SriLankan: Capital A CEO clarifies

Gota fires back at Cardinal, rebuts allegations

MIRROR CRICKET

Nepal put forward strong squad on T20 World Cup return

Sri Lanka continue unbeaten streak, Netherlands push for top spot in Group B

Wasim Akram to conduct training program for national players

Afghanistan announce T20 World Cup 2024 squad

TODAY'S HEADLINES

Reduced diesel price not sufficient for bus fare revision: Gemunu

BJP invites SLPP, UNP to study its election campaign

Indo-Lanka passenger ferry service to resume on May 13

Police looking for exhibitionist in Ahangama

Nepal put forward strong squad on T20 World Cup return

Sri Lanka continue unbeaten streak, Netherlands push for top spot in Group B

Wasim Akram to conduct training program for national players

Afghanistan announce T20 World Cup 2024 squad