The International Monetary Fund (IMF) on Wednesday (13) said that it supported Sri Lanka’s plans to engage in “collaborative dialogue” with creditors, a day after the country unilaterally suspended external debt payments amid a severe economic crisis, Reuters reported.
“We assessed Sri Lanka’s debt to be unsustainable and that the country’s fiscal efforts and macroeconomic policy adjustments alone could not restore debt sustainability,” Masahiro Nozaki, IMF’s mission chief for Sri Lanka, told Reuters in a statement.
“Therefore, we welcome the Sri Lankan authorities plan to engage in a collaborative dialogue with their creditors,” Nozaki said, adding that the IMF was assessing the specific implications of Sri Lanka’s recent announcement.
Meanwhile, Sri Lanka needs between $3 billion to $4 billion this year to pull itself out of an unprecedented economic crisis and plans to start talks with the International Monetary Fund for help, Finance Minister Ali Sabry said.
The nation is looking at making a “decent case” before the IMF to help preserve the economy, he said in an interview to Bloomberg Television’s Yvonne Man and David Ingles. Sabry said talks are scheduled to begin in Washington on April 18 and he expects emergency relief funds a week later, if things go well.
“Our appeal to them is to release it as soon as possible,” Sabry said, adding that the President Gotabaya Rajapaksa’s government still enjoys majority in Parliament and hence the rightful authority to engage with the lender. Sabry indicated some funds the nation is seeking will come from other lenders and governments besides the IMF, but didn’t provide a breakdown.
Sabry, along with newly appointed central bank Governor Nandalal Weerasinghe, is a key member of Rajapaksa’s team for bailout talks with the IMF. The funds are crucial to the success of a debt restructuring process initiated by the island nation this week after suspending some outstanding loan and interest payments.