COLOMBO – April 19 (ONLINE) The International Monetary Fund will consider providing quick financial assistance to debt-burdened Sri Lanka following representations by India, Sri Lanka’s finance ministry said on Tuesday.
A delegation headed by Sri Lanka’s Finance Minister Ali Sabry kicked off formal talks with the IMF in Washington on Monday for a programme the government hopes will help top up its reserves and attract bridge financing to pay for essential imports of fuel, food and medicines.
Shamir Zavahir, an aide to Sabry, said on Twitter that Sri Lanka asked for a loan under the rapid financial instrument (RFI) window, meant for countries needing urgent balance-of-payment support. But the global lender was initially not inclined to grant the request, he said.
“The IMF has subsequently informed Minister Sabry that India had also made representations on behalf of Sri Lanka for an RFI,” Sri Lanka’s finance ministry said in a statement.
“It had been communicated that IMF will consider the special request made despite it being outside of the standard circumstances for the issuance of an RFI.”
Sri Lanka’s sovereign dollar-denominated bonds came under pressure again on Tuesday, with longer-dated issues falling as much as 1.4 cents in the dollar to trade at deeply distressed levels of just over 40 cents, Tradeweb data showed.
The country’s devastating financial crisis has come as the effects of COVID-19 exacerbated mismanaged government finances and as rising prices of fuel sapped foreign reserves. Fuel, power, food and medicines have been running low for weeks.
Follow the PNI Facebook page for the latest news and updates.
