COLOMBO: The International Monetary Fund announced Thursday it has reached a preliminary agreement to provide Sri Lanka with $2.9 billion over four years to help it recover from its worst economic crisis.
The arrangement will help restore financial and macroeconomic stability and debt sustainability as well as enable the countryâ€™s growth potential, an IMF team visiting Sri Lanka said in a statement.
The package is contingent on approval from the IMF management and executive board, as well as on receiving assurances from Sri Lankaâ€™s creditors, which include China, India and Japan, that debt sustainability will be restored.
Speaking to reporters in Colombo, the IMFâ€™s Peter Breuer said that since Sri Lankaâ€™s debt is currently unsustainable, the lender will need to see an engagement between the country and its creditors before it can commit resources. â€œIf creditors are not willing to provide these assurances, that will deepen the crisis in Sri Lanka and would undermine its repayment capacity,â€ he said.
He said a collaboration between the creditors and Sri Lanka will help the nation emerge from the crisis faster, and suggested holding a forum between the two sides on restructuring its debts.