Managing Director of the International Monetary Fund, Kristalina Georgieva has commented on the Funds program with Sri Lanka.
“Very pleased that IMF staff and Sri Lankan government officials have reached a staff-level agreement to support the country’s economic policies with a 48-month Extended Fund Facility of about US$2.9 billion,” she said in a twitter.com message.
“This is an important step forward for Sri Lanka,”
Sri Lanka faces regular currency crises due to operating an intermediate monetary regime (soft-peg) and their frequency has increased in recent year amid more aggressive open market operations to target an output gap.
In December 2019 by policymakers also cut taxes to target a ‘persistent output gap’ followed by even more aggressive liquidity injections leading to steady loss of reserves and default by April 2022.