Sri Lanka to seek $4-b bailout package from IMF; delegation heads to US
The delegation led by newly-appointed finance minister Ali Sabry will hold talks with the International Monetary Fund between April 19 and April 24
A Sri Lankan government delegation is headed to the US on Sunday to engage with the IMF to secure a $4 billion package as it desperately tries to salvage the country’s beleaguered economy currently reeling under a severe forex crisis.
The delegation led by newly-appointed finance minister Ali Sabry will hold talks with the International Monetary Fund (IMF) between April 19 and April 24. Sabry has said that Sri Lanka is seeking a bail out package of $4 billion from the IMF, having earlier resisted calls to seek a facility from the global lender.
The visit is taking place days after the finance ministry on Tuesday announced that it is suspending repayments of foreign debt, including bonds and government-to-government borrowing, pending the completion of a loan restructuring programme with the IMF. Sri Lanka had to meet $7 billion of debt payments this year.
Severe cash crunch
This was the first ever debt default by Sri Lanka in its history since 1948 and the country’s 22 million people are facing crippling 12-hour power cuts, and an extreme scarcity of food, fuel and other essential items such as medicines.
The Securities and Exchange Commission of Sri Lanka (SEC) on Saturday announced that the Colombo Stock Exchange will remain temporarily closed for a week from Monday to provide investors an opportunity to have “more clarity and understanding” of the current economic conditions in crisis-hit Sri Lanka that would help them “to make informed investment decisions”.
Sri Lanka is facing its worst economic crisis since gaining independence from the UK in 1948. The economic crisis also triggered a political turmoil in the island nation with citizens holding nationwide street protests for weeks over lengthy power cuts and shortage of fuel, food and other daily essentials and demanding ouster of President Gotabaya Rajapaksa.
With the acute shortage of forex, an Indian credit line of $500 million for fuel imports has provided a lifeline to the island nation.
With agency inputs
