Sri Lanka's newly elected government, led by President Anura Kumara Dissanayake, has reaffirmed its commitment to the International Monetary Fund's (IMF) USD 2.9 billion bailout package, negotiated by the previous administration under Ranil Wickremesinghe.
During a meeting with the IMF team on Wednesday, Dissanayake's government expressed its intention to renegotiate certain conditions of the bailout.
The meeting comes two weeks after Dissanayake, the leader of the National People’s Power (NPP) party, was sworn in as the country's ninth president on September 23.
The government delegation was headed by Prof A. J. Fernando, appointed as Dissanayake's economic and finance advisor just two days prior.
"The primary objective of the visit was to discuss the progress of the IMF programme and the necessary steps towards the release of the fourth tranche of the USD 2.9 billion Extended Fund Facility," a statement from the President’s Media Division (PMD) noted.
Fernando described the discussions as productive, stating that the NPP government remains committed to the IMF's financial support, despite previously criticising Wickremesinghe’s bailout deal as “a death trap.”
He indicated that the NPP intends to explore alternative revenue-raising measures and emphasised the need for further negotiations.
The IMF's restructuring of Sri Lanka's external debt is a condition for the release of the bailout funds. The third tranche of the package was disbursed in mid-June, with the IMF stating on August 2 that Sri Lanka's economic reform programme had shown positive results.
The IMF team, led by mission chief Peter Breuer, expressed appreciation for the significant changes underway in Sri Lanka and noted a positive outlook under the new government.
The meeting was described as a crucial step towards reinforcing Sri Lanka’s commitment to economic stability and securing continued support from the IMF.
Sri Lanka has received three tranches of approximately USD 360 million each so far, with the next review expected to take place in Washington at the end of this month.
The island nation declared its first-ever sovereign default in April 2022 amid an unprecedented financial crisis, which led to the resignation of former President Gotabaya Rajapaksa.
Wickremesinghe negotiated the bailout package in March 2023, and just days before the presidential elections, his government announced a restructuring agreement for approximately USD 17.5 billion in external commercial debt.
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