7 March 2024 12:15 am Views - 592
The International Monetary Fund (IMF) will kick off the second review under the Extended Fund Facility (EFF) programme today.
According to Finance State Minister Shehan Semasinghe, the outcome of the review will be largely positive.
“Nobody should doubt the release of the third tranche. The second review is going to be better than the first. We are confident about that. Sri Lanka has achieved much of the progress required and fulfilled majority of the requirements listed by the IMF. So, we are good,” Semasinghe told Mirror Business.
While Sri Lanka has not yet sealed the memoranda of understanding with the official creditors and in-principle agreements with the bondholders, Semasinghe said it is not a major concern as of now, since the government is confident in both being finalised soon.
In the routine assessment carried out in January, the visiting IMF delegation asserted that under the debt restructuring effort, Sri Lanka must, by all means, have the agreements sealed before the second review takes place. It made clear that the negotiations on this matter would not be entertained beyond this crucial juncture.
The second review will formally kick off with the visiting IMF delegation engaging in discussions with President Ranil Wickremesinghe. The team will then move on to carry out the technical meetings with the relevant authorities such as the Finance Ministry and Central Bank of Sri Lanka, among others. The review will go on for two weeks.
In March 2023, Sri Lanka received the first tranche of US $ 330 million. Having shown satisfactory progress in the first review, the island nation received the second tranche under the EFF, amounting to US $ 337 million.
The total amount of Sri Lanka’s EFF arrangement is SDR 2.286 billion (about US $ 3 billion) as of the time of the programme approval on March 20, 2023. The programme supports Sri Lanka’s efforts to restore macroeconomic stability and debt sustainability, safeguard financial stability and enhance growth-oriented structural reforms.