Debt restructuring accelerated via IMF agreement: State Minister

• Reiterates SL is on track to receive second tranche of $ 330 m following approval from IMF’s Executive Board
• Acknowledges result is a concerted effort of officials from IMF, Central Bank, Finance Ministry
• Says SLA enables World Bank, ADB and other multilateral financial institutions to make remaining payments, expediting debt restructuring efforts with international partners
• Expresses optimism that agreements related to debt restructuring may soon be finalised
• Asserts IMF’s support for Sri Lanka’s upturn reflects global confidence in the country’s economic prospects

 

State Minister of Finance Shehan Semasinghe stated yesterday that the International Monetary Fund (IMF) staff-level agreement reached following the first review of Sri Lanka’s Extended Fund Facility (EFF) will help to settle dues payable to multilateral creditors while expediting the debt restructuring process. 

Speaking to journalists at a press conference held at the Presidential Media Centre (PMC) yesterday he reiterated that Sri Lanka is set to receive the second tranche of $ 330 million following the approval from the IMF’s Executive Board. 

“We successfully reached the staff-level agreement, a crucial step in securing the second tranche under our agreement with the IMF. Prior to this achievement, a team from the IMF conducted an extensive two-week review in Sri Lanka, engaging in detailed discussions on various topics. Given the complexity and scope of the discussions, it was not feasible to reach an agreement instantly,” he elaborated on the journey to reach this pivotal staff-level agreement. 

Semasinghe said they continued deliberations during the annual meeting of the IMF and the World Bank held in Morocco. “We engaged in in-depth discussions to clarify various aspects. Even then, we found it necessary to seek further clarifications on various matters, leading to continued discussions through an online platform once we returned to Sri Lanka. The agreement, as it stands today, is the result of concerted efforts and dialogues involving officials from the IMF, the Central Bank, and the Finance Ministry,” he added. 

Despite Sri Lanka’s good position with the International Monetary Fund in March 2023, he acknowledged the recent delays and misinterpretations. 

“We categorically stated within and outside of Parliament that there is no reason to fear the approval of the executive committee or the release of the second instalment. As a Government, we maintained our confidence,” he emphasised.

The State Minister also underscored that the staff-level agreement, marking the completion of the first review of the program with the IMF, plays a pivotal role in facilitating the payment of arrears to multilateral creditors and expediting the process of debt restructuring. 

Semasinghe acknowledged the leadership and the guidance of President Ranil Wickremesinghe in these endeavours, as well as the contributions of officials, including the Central Bank Governor and the Treasury Secretary in making these achievements possible. 

He noted that the staff-level agreement will enable the World Bank, Asian Development Bank (ADB) and other multilateral financial institutions to make the remaining payments, further expediting debt restructuring efforts with international partners.

The State Minister expressed optimism that agreements related to debt restructuring may soon be finalised, aligning with the Government’s objectives of reducing corruption and increasing transparency. 

He noted that the IMF’s support for Sri Lanka’s economic upturn demonstrates worldwide trust in the country’s economic prospects.