On Monday, the executive board of the International Monetary Fund gave its approval for a bailout of nearly $3 billion to Sri Lanka, which could aid the country in recovering from its severe financial crisis, the worst it has experienced in over seventy years. According to the office of Sri Lankan President Ranil Wickremesinghe, this decision will enable the country to access a total of up to $7 billion in funding.
According to the president’s office, the program sanctioned by the IMF will have a positive impact on Sri Lanka’s position in the global capital markets. On Monday, the executive board of the IMF granted approval for a four-year extended financing arrangement worth $3 billion for Sri Lanka, which will allow the country to receive around $333 million right away to alleviate its financial difficulties.
The International Monetary Fund stated that the newly implemented Extended Fund Facility (EFF) program is designed to address several key objectives in Sri Lanka, including the restoration of macroeconomic stability and debt sustainability, the mitigation of economic challenges for vulnerable communities, the protection of financial sector stability, and the strengthening of governance and growth prospects. The IMF also highlighted that the board’s endorsement would prompt other development partners to provide financial support. With the country facing high inflation, supply chain disruptions, and depleted foreign currency reserves following its default on overseas debt in the previous year, this bailout will provide much-needed financial support.
