Sri Lanka to discuss shape of IMF deal during Oct meetings in Washington

2:45 am Tuesday, October 01st, 2024

By Uditha Jayasinghe

COLOMBO (Reuters) – Sri Lanka will have detailed talks with the IMF on the framework of a $2.9 billion bailout programme on the sidelines of the lender’s annual meetings in Washington later this month, the country’s cabinet spokesperson said on Tuesday.

The delegation to the meetings in Washington will be led by the country’s central bank governor, treasury secretary and financial advisers to new president Anura Kumara Dissanayake, minister Vijitha Herath told reporters at a news conference.

Dissanayake said Sri Lanka will immediately engage with the International Monetary Fund (IMF) for the third review of its bailout programme, the approval of which will see the disbursement of a fourth tranche of about $337 million.

An IMF team will be on a three-day visit to Colombo from Wednesday to meet with Dissanayake and his team to discuss latest economic developments and reforms under Sri Lanka’s economic programme supported by the IMF, a spokesperson for the lender said.

“We are of the view that an evaluation needs to be conducted on the IMF programme but that will not be done with the delegation visiting this week,” Herath said, adding that the IMF delegation was making a “courtesy call” this week.

The 2024 annual meetings of the IMF and the World Bank is scheduled to take place during Oct. 21-26.

Millions of Sri Lankans voted for leftist leader Dissanayake in the debt-ridden island nation’s presidential election in September – the first since its economy buckled in 2022 – putting faith in his graft-fighting pledge and vow to bolster a fragile economic recovery.

Investors worry that Dissanayake’s desire to revisit the terms of the IMF bailout could delay future disbursements. But the fears have been somewhat allayed by the new president who said last week that the programme would move forward under his administration.

(Reporting by Uditha Jayasinghe; Writing by Sudipto Ganguly; Editing by Sonali Paul and Muralikumar Anantharaman)