Sri Lanka secured a staff-level agreement with the International Monetary Fund, paving the way for the nation to receive the next tranche of funding from its $3 billion bailout program.
(Bloomberg) — Sri Lanka secured a staff-level agreement with the International Monetary Fund, paving the way for the nation to receive the next tranche of funding from its $3 billion bailout program.
The nation and IMF staff reached a deal on economic policies to conclude the first review of its 48-month funding program, the Washington-based lender said in an Oct. 19 statement. The agreement must be approved by the IMF’s executive board before the nation can receive its next payout worth about $330 million.
“Macroeconomic policy reforms are starting to bear fruit and the economy is showing tentative signs of stabilization,” according to the statement. “Sustaining the reform momentum and addressing governance weaknesses and corruption vulnerabilities are critical to put the economy on a path towards lasting recovery and stable and inclusive growth.”
The IMF also said the nation needs to secure agreements with official creditors to restructure debts, acknowledging that negotiations are also ongoing with commercial lenders.
Sri Lanka has made some progress with its restructurings recently, carrying out an exchange of local debt and striking a tentative deal with the Export-Import Bank of China.
A group of dollar bondholders also submitted a restructuring proposal, though the Ministry of Finance said the suggested plan “has not received a favorable response from Sri Lanka.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.