Preliminary round of IMF discussion with Sri Lanka ended in a positive mode
Sri Lankan Prime Minister Ranil Wickremesinghe. (Photographer: Buddhika Weerasinghe / Bloomberg)
Discussions between a 10-member International Monetary Fund (IMF) staff level delegation and the Sri Lankan delegation led by Prime Minister Ranil Wickremesinghe commenced at the Prime Minister’s Office yesterday (June 20).
The preliminary discussion with the IMF delegation was attended by the Secretary to the Finance Ministry and the Governor of the Central Bank of Sri Lanka (CBSL) and senior finance adviser to the Prime Minister.
The Prime Minister’s Office said that the preliminary round of discussions to obtain loan assistance from the IMF for Sri Lanka had ended on a positive mode.
The first in-person talks with the IMF on Sri Lanka’s bailout request is set to continue for 10 days with the officials of the Finance Ministry and CBSL.
The IMF team is on a visit to the island for talks on a bailout programme, as Sri Lanka is struggling with its worst financial crisis.
IMF representatives will also hold discussions with consultants from international firms Lazard and Clifford Chance, which have been selected to advise on the role of debt restructuring in Sri Lanka.
Central Bank Governor Nandalal Weerasinghe, Mahinda Siriwardena, Secretary to the Ministry of Finance, Prime Minister’s Senior Economic Adviser Dr. R.H.S. Samaratunga, Deputy Governors of the Central Bank and Secretary to the Prime Minister Saman Ekanayake were also present.
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The IMF will provide a staff level agreement for a few dollars which will be ‘eaten’ quickly.
Then, the IMF will require discipline on public spending, which include cutting a subsidy on the consumption of fuel, reduction of Public Servants and making pledges to slash its budget deficit.
It will also require meetings with SL,s international creditors – which include a plethora of Chinese entities, Western banks, sovereign bilateral lenders and multilateral institutions, for debt restructuring.
This will take more than 2 years.
The ARAGALAYA will continue and be strengthened.