The governor of Sri Lanka’s Central Bank says he is confident it will receive the second instalment of a $2.9-billion bailout package from the International Monetary Fund before the end of the year
ByBHARATHA MALLAWARACHI Associated Press
November 24, 2023, 6:26 AM
COLOMBO, Sri Lanka — The governor of Sri Lanka’s Central Bank said Friday he’s confident it will receive the second instalment of a $2.9-billion bailout package from the International Monetary Fund before the end of the year, after payment was delayed due to inadequate oversight and debt restructuring.
“I am confident that we are making very good progress. We are moving in the right direction,” said Nandalal Weerasinghe.
Sri Lanka plunged into economic crisis in 2022, suffering severe shortages and drawing strident protests that led to the ouster of then-President Gotabaya Rajapaksa. It declared bankruptcy in April 2022 with more than $83 billion in debt — more than half of it to foreign creditors. The IMF agreed in March to a $2.9-billion bailout package, releasing the first payment shortly thereafter.
The IMF’s review in September said Sri Lanka’s economy was recovering, but it needed to improve its tax administration, eliminate exemptions and crack down on tax evasion.
Over the past year, Sri Lanka’s severe shortages of essentials like food, fuel and medicine have largely abated, and authorities have restored a continuous power supply. But there has been growing public dissatisfaction with the government’s efforts to increase revenue collection by raising electricity bills and imposing heavy new income taxes on professionals and businesses.
Weerasinghe said the Export–Import Bank of China — one of Sri Lanka’s creditors from which it needs financial assurance in order to receive the second bailout installment of $330 million — has already given its consent, and he hoped the country’s other creditors in the Official Creditor Committee would soon follow suit. Sri Lanka needs the consent of the OCC which is co-chaired by India, Japan and France and includes 17 countries, for the IMF to approve the payment.