Govt. still hoping for Q1 bailout as US says process has sped-up

State Minister of Finance Shehan Semasinghe told The Daily Morning yesterday (31 January) that the Government is confident and optimistic that it would receive the International Monetary Fund’s (IMF) Board-level approval for the desperately needed Extended Fund Facility (EFF) within the first quarter of this year, shortly after US Ambassador to Sri Lanka Julie Chung assured Semasinghe that assistance due from the IMF to Sri Lanka is likely to speed up with the co-operation of all countries.

The US is by far the largest contributor to the IMF and is its most influential member.

Speaking to The Daily Morning, the State Finance Minister said: “It is vital for us at this moment for the stability of the economy and to build up confidence among the diplomatic and international communities as well as investors.”

When queried as to whether the two-year debt moratorium promised by the Export-Import Bank of China (EXIM) to Sri Lanka is sufficient, he said: “It is a very complex programme and a complex affair. The letter has to be accepted by the IMF. It will have to fulfil the conditions that they require; however, none of the assurances, negotiations, or discussions can be done the way we want.”

He also said that it has to be a joint and collaborative effort from all sides. “There has to be an understanding between us and the creditors as well as the IMF. We are waiting for positive news from the Paris Club. India has already given assurances. There will be a couple of more important dialogues taking place at the highest level with the Chinese authorities also. We need this approval as fast as possible in order to ensure stability in the economy. It is about going through the IMF regulations. The IMF also has supported us to the fullest so far and they have engaged with us. We are trying our best to make sure that we comply with their requirements,” he added.

China’s EXIM Bank offered Sri Lanka a two-year moratorium on its debt and said that it would support the country’s efforts to secure the $ 2.9 billion loan from the IMF. India wrote to the IMF earlier this month, saying that it would commit to supporting Sri Lanka with financing and debt relief.

Earlier yesterday, US Ambassador to Sri Lanka Julie Chung had assured Semasinghe during a meeting that assistance due from the IMF to Sri Lanka is likely to speed up.

Chung had stated that foreign countries are now in the process of further confirming their credibility regarding the Sri Lankan Government’s debt restructuring programme, a statement issued by the Ministry of Finance revealed.

Meanwhile, speaking on the efforts taken by the Government to maintain financial stability, Ambassador Chung noted that despite the unpopular reforms taken in this regard, the unity shown by working together as a country must be appreciated.

Thus, the diplomat assured that Sri Lanka will obtain favourable decisions from their international creditor, and will be able to achieve a more stable economy soon, towards which the US Government will also continue to extend their fullest support.