ADB assures more support to SL post-IMF Board approval of EFF program

Wednesday, 28 September 2022 00:23 - - {{hitsCtrl.values.hits}}

ADB President Masatsugu Asakawa

The Asian Development Bank (ADB) yesterday reassured further support for crisis-hit Sri Lanka once the International Monetary Fund (IMF) Board approves the $ 2.9 billion four-year Extended Fund Facility program.

ADB President Masatsugu Asakawa told journalists that reaching the Staff Level Agreement by Sri Lanka with the IMF earlier this month was a positive development and expressed confidence in the Government receiving “financing assurances” from relevant creditors leading up to the IMF Executive Board approving the new support program for Sri Lanka.

Sri Lanka has suspended servicing of external debt worth $ 46 billion since April and is negotiating debt restructuring with bilateral, official and private creditors.

“Sri Lanka is facing a difficult situation with growth contracting and high inflation,” ADB Chief said at his first briefing at the on-going 55th Annual Meeting in Manila, Philippines.

He recalled that on 9 September ADB and the Sri Lankan Government signed a $ 200 million emergency loan to finance the implementation of food Security and Livelihood Recovery Emergency Assistance Project. It aims to ensure access to food and protect livelihoods of the poor and vulnerable, especially women and children. The loan will be provided from ADB’s Ordinary Capital Resources.

“We have been repurposing funds to support and we stand ready to extend further assistance and will augment additional financial resources after the IMF Board approves the support program,” Asakawa added.

He also expressed pleasure that Sri Lankan President Ranil Wickremesinghe who is also the Chair of the Board of Governors of ADB has joined the Annual Meeting.

In its Asian Development Outlook Update released last week, ADB revised Sri Lanka›s growth outlook to a negative 8.8% this year as against a positive 2.5% estimate made in April. ADB is also forecasting a 3.3% negative growth next year for Sri Lanka revising from a 2.5% positive growth previously forecast.

ADB plans $ 14 b to ease food crisis, promote long-term food security in Asia-Pacific