Basil meets top IMF official amid economic crisis

• “The talks were wide ranging and covered key challenges economy is facing”-FinMin source
• SL is expected to start formal negotiations with IMF in April on possible programme
• IMF Asia and Pacific Department Director Changyong Rhee to meet President today

REUTERS: Sri Lanka’s Finance Minister held talks with a top International Monetary Fund (IMF) official yesterday, two sources said, as the island nation seeks help to deal with its plunging reserves, a sliding currency and surging inflation.

IMF Asia and Pacific Department Director Changyong Rhee met Finance Minister Basil Rajapaksa and Treasury Secretary S.R. Atygalle, two Finance Ministry officials told Reuters.

Sri Lanka is expected to start formal negotiations with the IMF in April on a possible programme that could boost reserves and put growth on a sustainable path.

In yesterday’s talks, officials discussed details of the IMF’s latest review of the economy and the assessments outlined by the IMF executive directors at an IMF board meeting in late February.

Rhee meets Sri Lankan President Gotabaya Rajapaksa today.
“The talks were wide ranging and covered key challenges the economy is facing,” said one of the ministry officials, asking not to be named, given the sensitivity of the talks.

“Right now, the focus is on how Sri Lanka can get the IMF support. Talks on specific proposals will come later,” the official added, adding that Rajapaksa would brief the Cabinet about the talks at a weekly meeting yesterday evening.

Sri Lanka has been hit by a dollar drought with reserves dropping to US $ 2.31 billion in February. The country is struggling to pay for critical imports including fuel, food and medicines.

Chronic shortages have hit Sri Lankans hard with rolling power cuts, long lines at pumps and record levels of inflation.

Last week the Sri Lankan rupee fell 30 percent after the government allowed the currency to free-float, driving prices even higher.