CBSL Governor suitably assesses suitability of EFF for Sri Lanka

In his statement, the governor claimed that the Extended Fund Facility (EFF), which has a longer repayment period and requires structural reform, is best suited for Sri Lanka.

To evaluate the suitability of an EFF, FactCheck.lk consulted fact sheets on lending arrangements released by the International Monetary Fund (IMF) and the history of lending arrangements in Sri Lanka.

The suitability of the EFF was evaluated based on two main criteria: (1) the repayment period of a facility, (2) the quantity of funds obtained from a facility.

Evaluation of criteria 1: Exhibit 1 shows the eight lending facilities offered by the IMF. The EFF has a repayment period second only to the External Credit Facility (ECF), for which Sri Lanka is not eligible. 

Evaluation of criteria 2:  In comparison to the average funding obtained for all programmes Sri Lanka has had with the IMF, the EFF obtained the largest average funding worth of SDR 416.97 million.  

Based on the evaluation of the above two criteria and the constraint of eligibility, the EFF provides the largest quantum of funds on the most concessional repayment period—making it best suited for the country. 
Therefore, we classify the governor’s statement as TRUE.

NB: The EFF allows up to 145% of a country’s quota to be accessed annually. Based on Sri Lanka’s quota of SDR 578.8 million Sri Lanka can receive SDR 839.26 million (approx. USD 1.1 billion) annually via an EFF. However, in the context of unsustainable debt and restructuring challenges, Sri Lanka may even require assistance that goes beyond the standard facilities available from the IMF.

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.

Statement on infographic: An Extended Fund Facility (EFF)—which allows longer repayment periods—may be best suited to the country, it typically requires deeper structural reforms.

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