Category: News

Pakistan and Sri Lanka will look to boost bilateral cooperation particularly in the political, trade, and cultural spheres.

The High Commissioner–designate of Sri Lanka to Pakistan, Fred Seneviratne paid a courtesy call on the Additional Secretary, Asia Pacific, Ambassador Imran Ahmed Siddiqui, at the Ministry of Foreign Affairs of Pakistan.

The Additional Secretary extended a warm welcome to the High Commissioner-designate and conveyed his heartfelt congratulations on the latter’s appointment as Sri Lanka’s High Commissioner to Pakistan. He also briefed the High Commissioner–designate on the longstanding and cordial relations between the two countries and discussed avenues to further enhance bilateral cooperation, particularly in political, trade, and cultural spheres.

High Commissioner-designate Seneviratne expressed his gratitude to the Additional Secretary for the warm welcome and the opportunity to engage in a productive dialogue. He shared insights into Sri Lanka’s recent developments and expressed his commitment to strengthening collaboration in areas of mutual interest.

The High Commissioner–designate was accompanied by Minister of the High Commission, Christy Ruban during the meeting.

The International Monetary Fund (IMF) has warned that while Sri Lanka’s economic outlook is positive, downside risks have increased.

Kenji Okamura, Deputy Managing Director and Acting Chair said that the government should continue to implement governance reforms and advance trade-facilitation reforms to boost export growth and diversification.

On July 1, 2025, the Executive Board of the International Monetary Fund (IMF) completed the Fourth review under the 48-month Extended Fund Facility (EFF) Arrangement, allowing the authorities to draw SDR254 million (about US$350 million). This brings the total IMF financial support disbursed so far to SDR1.27 billion (about US$1.74 billion).[1]

The EFF arrangement for Sri Lanka was approved by the Executive Board on March 20, 2023 (see Press Release No. 23/79) in an amount of SDR 2.286 billion (395 percent of quota or about US$3 billion). The program supports Sri Lanka’s efforts to durably restore macroeconomic stability by (i) restoring fiscal and debt sustainability while protecting the vulnerable, (ii) safeguarding price and financial sector stability, (iii) rebuilding external buffers, (iv) strengthening governance and reducing corruption vulnerabilities, and (v) enhancing growth-oriented structural reforms.

The Executive Board reviewed a report from the Managing Director on the inadvertent provision of inaccurate data by Sri Lanka on the ceiling of the central government’s stock of expenditure arrears. The under-reporting of the arrears stock identified through a detailed analysis of budget line appropriations gave rise to noncomplying purchases and a breach of Sri Lanka’s obligations under Article VIII, Section 5. The authorities have worked openly and closely with IMF staff to provide corrected data and have undertaken several corrective measures related to the clearing and reporting of arrears. They are also committed to improving reporting and data verification practices going forward in line with IMF technical assistance. Based on these actions, the Executive Board approved the authorities’ request for waivers of non-observance.

The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]

Following the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:

“Sri Lanka’s performance under the Fund-supported arrangement is generally strong with some implementation risks being addressed. Reforms are bearing fruit, with economic growth strengthening, inflation remaining low, reserves accumulating, and fiscal revenues improving. The debt restructuring process is nearing completion. The economic outlook is positive, but downside risks have increased. In case shocks materialize, the authorities should work closely with the Fund to assess the impact and formulate policy responses within the contours of the program. Steadfast program implementation will be crucial.

“Sustained revenue mobilization is critical to restoring fiscal sustainability and creating fiscal space. Strengthening tax exemption frameworks, boosting tax compliance, and enhancing public financial management to ensure effective arrears management are important. Further improving the coverage and targeting of social support to the vulnerable is also necessary. A smoother execution of capital spending within the fiscal envelope would help foster medium-term growth. The restoration of cost-recovery electricity pricing and the operationalization of automatic electricity tariffs adjustment are commendable and should be maintained to contain fiscal risks.

“The progress to advance the restructuring of Sri Lanka’s debt is noteworthy. Timely finalization of bilateral agreements with remaining official and commercial creditors is a priority.

“Monetary policy should continue to prioritize price stability, supported by sustained commitment to eliminate monetary financing and safeguard central bank independence. Greater exchange rate flexibility and gradually phasing out administrative balance of payments measures remain critical to rebuild external buffers and economic resilience.

“Resolving non-performing loans, strengthening governance and oversight of state-owned banks, and improving the insolvency and resolution frameworks are important to revive credit growth and support private sector development.

“Structural reforms are crucial to unlock Sri Lanka’s potential. The government should continue to implement governance reforms and advance trade-facilitation reforms to boost export growth and diversification.”

Following the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:

“The Executive Board of the International Monetary Fund (IMF) reviewed noncomplying purchases made by Sri Lanka under the 2023 Extended Arrangement under the Extended Fund Facility (“EFF”), as well as a breach of obligations under Article VIII, Section 5. The noncomplying purchases arose as a result of the provision of inaccurate information by the authorities on the stock of expenditure arrears at the first, second, and third reviews under the EFF.

“The inaccuracies in information provided to the IMF were inadvertent and arose because of weaknesses in the timely reporting of arrears by line ministries to the Ministry of Finance, as well as a misunderstanding by the authorities of the definition of “arrears” under the Technical Memorandum of Understanding.

“The Executive Board positively considered the authorities’ corrective actions, the fact that arrears repayments will be accommodated within the existing fiscal envelope, and the authorities’ commitment to improving public financial management procedures in line with the new PFM law, to reduce the risk of accruing arrears or inaccurate reporting of information going forward. In view of the above, the Executive Board agreed to grant waivers for the nonobservances of the quantitative performance criterion that gave rise to the noncomplying purchases and decided not to require further action in connection with the breach of obligations under Article VIII, Section 5.”

President Donald Trump has said he signed 12 tariff letters which will be sent out on Monday, after earlier saying they will be sent on Friday amid expectations in Sri Lanka of getting a communication early.

“I signed some letters and they’ll go out on Monday, probably twelve,” Trump told reporters Saturday.

“Different amounts of money, different amounts of tariffs.”

Sri Lanka was slapped with a 44 percent Trump tariff which was suspended till July 09 after reducing the tariff to 10 percent.

Sri Lanka was among the first set of countries to start negotiating with the US.

Cabinet spokesman Nalinda Jayatissa said last week that Sri Lanka expected a letter before the July 09 deadline.

“We have an expectation from our side that we can get some amendment of the tariff to minimise the effect on the economy and our exporters as a result of interventions the government has made,” he said.

There have been reports that the rate in the ‘Trump letter’ will go into effect from August 01.

It is not clear what Trump meant by ‘different amounts of money’ in his latest comments on Saturday. But some countries had promised higher imports, and Trump had also remarked that ‘small’ countries would get some relief.

Sri Lanka is keen not to be at a disadvantage with competitors, which would lead to a shift of business, especially apparel.

India, which had more imports from the US and a lower trade surplus, proportionately than Sri Lanka was hit by only a 26 percent Trump tariff, Pakistan 29 percent and Bangladesh 37 percent.

Trump said he had struck a deal with Vietnam leader To Lam for a 20 percent tariff (down from 46 percent), but details are not clear given his tendency to make sweeping generalizations.

The families of the missing in Sri Lanka emphasized the importance of acknowledging their suffering and the need to receive answers, at a conference facilitated by the International Committee of the Red Cross (ICRC).

The 2nd National Conference for Families of Missing Persons in Sri Lanka took place from 25 – 27 June 2025 in Colombo.

Facilitated by the International Committee of the Red Cross (ICRC), the conference brought together 62 representatives of families of missing persons from all communities and diverse regions in Sri Lanka.

The conference provided a neutral humanitarian space for families of missing persons to interact with families from other communities, exchange views and discuss common issues and challenges faced in the continuous search for their missing loved ones and how to overcome them collectively.

The need to know the fate and whereabouts of their missing loved ones was reiterated throughout the conference by the participating families of missing persons.

The 2nd National Conference for Families of Missing Persons also served as a forum for families to engage in a direct, interactive dialogue with the relevant authorities on improving the existing processes and mechanisms available in Sri Lanka to address the multifaceted needs of families of missing persons.

Speaking to the families, Minister of Justice and National Integration, Harshana Nanayakkara, highlighted the importance of justice, acknowledgment, and economic and psychosocial support for families of missing persons, while the officials from the Office on Missing Persons responded to queries from families.

The participants also benefitted from a presentation on the use of the certificate of absence, delivered by the representatives from the Registrar General’s Department.

Further, the families engaged in a dialogue on their needs and challenges with members of the international community.

At the event, the findings from a recently concluded review of needs and expectations of families of missing persons in Sri Lanka, conducted by the ICRC, was shared with the participating families, representatives of the international community, and civil society actors.

The conference also included a panel discussion with two psychologists specializing in dealing with ambiguous loss or ‘frozen grief’.

The representatives of families of missing persons emphasized the importance of acknowledging their suffering and the need to receive answers on the fate and whereabouts of their missing loves ones while drawing attention to the necessity for comprehensive support from authorities.

The 2nd National Conference for Families of Missing Persons in Sri Lanka was conceptualized, in consultation with families of missing persons from the East, North and South of Sri Lanka, reflecting their priorities.

Sri Lanka has now access to Starlink’s high-speed, low-latency internet. Elon Musk, billionaire head of SpaceX and Tesla said in his X social media platform.

“Starlink’s high-speed, low-latency internet is now available in Sri Lanka!”, Musk tweeted in his verified X account.

Sri Lanka started discussions with Starlink under the previous government headed by Ranil Wickremesinghe.

Sri Lanka’s telecommunication regulator last year granted a telecommunications service provider license to a locally incorporated firm of Starlink satellite system founded by Musk. The island nation has already amended its Telecommunications Regulatory Commission (TRC) Act to accommodate the Starlink satellite system.

Sri Lanka initiated the move after former President Wickremesinghe met Musk on the sidelines of the 10th World Water Forum in Indonesia three months ago.

The collaboration with Starlink is expected to provide internet facilities via satellite technology, marking a significant transformation in the technology sector with a fast internet service.

Starlink is not yet established as a telephone network company in Sri Lanka.

Starlink is a low earth orbit satellite network, connected to Musk’s SpaceX group.

The network connects around 4.5 million people around the world with high-speed internet across nearly 100 countries, territories and other markets.

The Executive Board of the International Monetary Fund (IMF) completed the Fourth review under the 48-month Extended Fund Facility (EFF) Arrangement, allowing the authorities to draw about US$350 million, said Evan Papageorgiou, IMF Mission Chief for Sri Lanka.

This brings the total IMF financial support disbursed so far to about US$1.74 billion.

“The EFF arrangement for Sri Lanka was approved by the Executive Board on March 20, 2023 in an amount of SDR 2.286 billion (395 percent of quota or about US$3 billion). The program supports Sri Lanka’s efforts to durably restore macroeconomic stability by (i) restoring fiscal and debt sustainability while protecting the vulnerable, (ii) safeguarding price and financial sector stability, (iii) rebuilding external buffers, (iv) strengthening governance and reducing corruption vulnerabilities, and (v) enhancing growth-oriented structural reforms.”

The relationship with India and Sri Lanka is strong and the business community and take links further, High Commissioner Santosh Jha said in Colombo speaking to a group of visiting Indian chief executives and local business leaders.

India had so far given 7 billion dollars in development aid to Sri Lanka including 800 million dollars in grants. Recently 100 million dollars in loans were written off into grants.

“And there is, of course, the debt restructuring and the softening of the loans that were extended during the emergency assistance that we provided Sri Lanka in 2022,” High Commissioner Jha said.

“It is basically to convey that India remains Sri Lanka’s most reliable friend and the most
dependable partner. And that we do so without condition. We are not asking anything in return.

“We just need your help in building trust and goodwill, in building relationships that are enduring, that are to the mutual benefit of both countries.”

The CEO delegation from the Confederation of India Industry had met the Prime Minister of Sri Lanka, the Energy Minister and was due to meet the President.

“I would say we are today having a relationship that has been probably the best ever that we have had,” High Commissioner Jha said to an audience that also included key senior politicians from the ruling party and opposition at the Indian invested ITC Ratnadipa Hotel.

“The range of sectors, the intensity of contacts, the depth of the partnership, the impact – in terms of the potential it has – on respective sectors of our economies will be really, really immense.

“And I hope that this delegation today and tomorrow has taken this process forward in a business sense.”

The group of 15 CEOs who visited Colombo and met Sri Lankan counterparts were a ‘serious delegation’ , some of whom had already invested in Sri Lanka and would like to expand, while others were new, he said.

And Indian firm said last week it was buying the controlling stake of Colombo Dockyard from its Japanese shareholder in the first major private investment in the country after the latest currency crisis.