Sri Lanka to Discuss Structure of IMF Deal During October Meetings in Washington, Reports Reuters

By Uditha Jayasinghe

COLOMBO (Reuters) – Sri Lanka plans to conduct in-depth discussions with the International Monetary Fund (IMF) regarding the framework of a $2.9 billion bailout program during the lender’s forthcoming annual meetings in Washington later this month, as stated by the country’s cabinet spokesperson on Tuesday.

The Sri Lankan delegation, headed by the central bank governor, treasury secretary, and financial advisors to the new president Anura Kumara Dissanayake, will attend the meetings, according to Minister Vijitha Herath during a news conference.

Herath mentioned that Sri Lanka is set to immediately engage with the IMF for the third review of its bailout program, which, upon approval, will lead to the disbursement of a fourth tranche amounting to approximately $337 million.

An IMF team is scheduled to visit Colombo for three days starting Wednesday to meet with Dissanayake and his team to discuss the latest economic developments and reforms associated with Sri Lanka’s economic agenda backed by the IMF.

"We believe that an evaluation of the IMF program is necessary, but that assessment will not occur with the delegation’s visit this week," Herath explained, noting that the IMF delegation is making a "courtesy call" during this time.

The 2024 annual meetings of the IMF and the World Bank are set to take place from October 21 to 26.

Millions of Sri Lankans supported leftist leader Dissanayake in the presidential election held in September, the first since the economy faced severe challenges in 2022. Voters expressed their trust in his promises to combat corruption and strengthen the fragile economic recovery.

Investors have expressed concerns that Dissanayake’s intentions to reassess the terms of the IMF bailout could postpone future disbursements. However, these worries were somewhat eased by the new president, who indicated last week that the program would progress under his administration.