Recently responding to the 10 billion Yuan currency swap with the People’s Bank of China, the International Monetary Fund (IMF) said it would continue to monitor the financial developments and economic policy in Sri Lanka.
The IMF stated that it received a request from Sri Lanka for emergency financial support to help fight the COVID-19 pandemic, however the assessment of the support had taken longer than other countries due to Sri Lanka’s intimidating economic challenges and high public debt.
“So we have sought, but not reached understanding, on how to fulfil the key requirements for what could be a rapid financing instrument which would include policies to continue ensuring debt sustainability to address the balance payment challenges including the COVID‑19 impact on tourism and to preserve international reserves. Indeed, Sri Lanka has relied on important restrictions since last year and recently introduced additional measures such as a requirement to convert 25% of export proceeds. We continue to closely monitor these economic policy and financial developments in Sri Lanka, including the recent agreement for a currency swap with the People’s Bank of China,” states an IMF spokesman. The IMF approved the extended Fund programme with the IMF in 2016, which had recently expired in June 2020.