IMF set to provide $2.9 billion to help crisis-hit Sri Lanka

THE International Monetary Fund announced Thursday it has reached a preliminary agreement to provide Sri Lanka with $2.9 billion over four years to help it recover from its worst economic crisis.

The arrangement will help restore financial and macroeconomic stability and debt sustainability as well as enable the country’s growth potential, an IMF team visiting Sri Lanka said in a statement.

The package is contingent on approval from the IMF management and executive board, as well as on receiving assurances from Sri Lanka’s creditors, which include China, India and Japan, that debt sustainability will be restored.

Speaking to reporters in Colombo, the IMF’s Peter Breuer said that since Sri Lanka’s debt is currently unsustainable, the lender will need to see an engagement between the country and its creditors before it can commit resources. “If creditors are not willing to provide these assurances, that will deepen the crisis in Sri Lanka