IMF says ready to move forward with programme discussions with new government

Colombo, September 13 (Daily Mirror) - The International Monetary Fund (IMF) said it is ready to move forward with programme discussions after the Presidential election is held and a new government is formed based on the choice of the people.

IMF Communications Department Director Julie Kozack said the programme has made significant achievements, but it is important to safeguard these achievements to enable Sri Lanka to fully emerge from one of its worst crises.

She made these remarks while responding to a question whether it is possible to renegotiate or revisit the debt sustainability assessment with regard to the EFF programme as claimed by opposition factions.

"With respect to the upcoming Presidential election, this is for the people of Sri Lanka to decide. From the IMF's position, what we see is a programme that has made significant achievements, but that it is important to safeguard these achievements to enable the country to fully emerge from one of its worst crises. And as mentioned in a media release during the timing of the Third Review, the timing of the Third Review will be discussed with the government following the election. So we will move forward with programme discussions after the p
Presidential election is held and a new government, or the outcome based on the choice of the people, we will be ready  to go with that," Kozack said.

Responding to another question on the possible results of the September 21 Presidential election and what the election implications could be for that USD 3 billion programme existing currently with Sri Lanka, Kozack said achieving the programme's objectives is a key priority to give Sri Lanka a chance to emerge from one of its worst crises in history.

"On June 12th of 2024, our Executive Board completed the 2024 Article IV Consultation and the Second Review of the EFF programme. That provided the country with access to about 336 million US dollars. Programme performance remains strong. Reform efforts are bearing fruit. Economic growth is starting to revive. Inflation is coming down. Reserves, international reserves are increasing and revenue mobilisation is improving.  Nonetheless, important vulnerabilities do remain, and sustaining reform momentum is going to be essential," she said, adding that Sri Lanka has made a lot of progress, but the country is not out of the woods yet, and it is important to safeguard those hard won gains.

Responding to another question on Sri Lanka's debt restructuring, she said, "An IMF team visited Colombo earlier in August and issued a media release at that time.  As mentioned in the media release, the execution of the domestic debt restructuring and finalising the agreement with the official creditor committee and China EXIM Bank are major milestones.  The staff assessed what's the so-called joint working framework, and the staff has also provided an assessment of this framework to the Sri Lankan authorities. Furthermore, at the request of the Sri Lankan authorities, the IMF staff has shared this assessment with the financial advisors of the country's bondholders. So that is where our role has been on the debt. And I also just want to reemphasise that with respect to debt restructuring, the IMF does not take part in the negotiations. In the debt restructuring negotiations and discussions, those negotiations are between the member country and its creditors, with the IMF making an overall assessment of debt sustainability," she added.