Sri Lanka Gains IMF's Provisional Agreement For $2.9Bn Loan

• Sri Lanka has reached a preliminary agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion, the global lender said on Thursday, as the country seeks a way out of its worst economic crisis in decades.
• The agreement, which Reuters first reported on Wednesday, August 31, 2022, is subject to approval by IMF management and its executive board and is contingent on Sri Lankan authorities following through with previously agreed measures.
• IMF conditions for the loan also include receiving financing assurances from Sri Lanka's official creditors and efforts by the country to reach an agreement with private creditors. Its programme, spread over four years, will aim to boost government revenue, encourage fiscal consolidation, introduce new pricing for fuel and electricity, hike social spending, bolster central bank autonomy and rebuild depleted foreign reserves. The country's reserves stood at $1.82 billion as of July, according to central bank data.
• "The programme aims to reach a primary surplus of 2.3% of GDP by 2024," it added. Once the IMF package is approved, Sri Lanka is also likely to receive further financial support from other multilateral creditors.

 

(Source: Reuters)