Sri Lanka: IMF Lauds Progress; Outlines Critical Steps for Debt Deal

The International Monetary Fund said on Thursday (16), that Sri Lanka’s overall program performance, has been strong.

Julie Kozack, Director of Communications at the International Monetary Fund (IMF) speaking to reporters in Washington D.C., said that the completion of the review by the IMF Executive Board requires two critical components.

“First, the implementation by Sri Lankan authorities of the agreed prior actions. Second, the completion of the financing assurances review. This review will confirm contributions from multilateral partners and assess adequate progress in debt restructuring,” she said in reponse to question raised by News 1st’s Zulfick Farzan.

Kozack noted that Sri Lanka’s macroeconomic policies are beginning to yield positive results.

She said that commendable outcomes include a rapid decline in inflation, robust reserve accumulation, and initial signs of economic growth, all while maintaining stability in the financial system

Looking ahead, Kozack outlined the next steps for Sri Lanka’s debt restructuring efforts, noting that the primary focus now is to conclude negotiations with external private creditors and to implement the agreements in principle with Sri Lanka’s official creditors.

She noted the challenges in reaching a consensus with external bondholders, stating, that the initial debt restructuring negotiations with external bondholders ended in mid-April without an agreement.

However, she said that discussions are ongoing with the aim of reaching an agreement in principle.