COLOMBO: The International Monetary Fund today announced that it will provide a loan of $2.9 billion over four years to Sri Lanka under a preliminary agreement, making the debt-ridden island nation one of its biggest ever. It is being given to come out of bad economic crisis and protect people’s livelihood.
Sri Lanka is going through the worst economic crisis since its independence in 1948, which has seen a sharp decline in its foreign exchange reserves. The Sri Lankan Government and the International Monetary Fund team have reached a staff level agreement. The agreement is to support economic adjustment and reform policies with a new 48-month Extended Fund Facility with a request to receive up to $2.9 billion. The new agreement will support Sri Lanka’s program to restore macronomic stability, while safeguarding financial stability, reducing opportunities for corruption and increasing the country’s economic growth opportunities, it said.
However, this agreement is still pending the approval of the IMF Management and Executive Board which will be given in the future. It may be mentioned here that all Sri Lanka’s lenders, including China, have agreed to restructure their existing loans before the IMF starts disbursing $2.9 billion to the island nation.