Cabinet discusses IMF bailout at length; no decision taken

Considering the foreign exchange crisis and the low sovereign credit rating, the Cabinet of Ministers has discussed exploring the possibilities of taking an International Monetary Fund (IMF) bailout.

“The Cabinet of Ministers had an in-depth discussion on the pros and cons of going to the IMF to seek financial support. However, no decision was taken,” Cabinet Co-Spokesman and Energy Minister Udaya Gammanpila said in response to a query at the post-Cabinet meeting media briefing yesterday.

The Opposition MPs, as well as certain economists, have long opined that the only way out for Sri Lanka from the foreign reserves and debt crisis would be by seeking support from the IMF.

However, Central Bank Governor Ajith Nivard Cabraal has been a strong opponent of the move, ruling out a debt restructuring with IMF support on many occasions. He instead has insisted that the Central Bank has enough expertise within and that at present each foreign debt liability was under study with the exploration of different strategies to deal with those.

Sri Lanka’s foreign reserves are now as low as $ 2.3 billion, sufficient only for a month's imports.

On Monday, the Energy Minister declared that the Sapugaskanda oil refinery would be closed for 50 days to manage the limited foreign reserves to import essential items to the country.