‘Lanka to present debt restructuring programme to IMF by August’
COLOMBO: Sri Lanka will present a debt restructuring programme to the IMF by August to secure a bailout package, Prime Minister Ranil Wickremesinghe told Parliament on Tuesday, but acknowledged that negotiations with the global lender were "more difficult and complicated" than in the past as the country is now "bankrupt."
Sri Lanka is going through the worst economic crisis since its independence from Britain in 1948, and needs to obtain at least USD 4 billion to tide over the acute shortage in foreign exchange reserves.
An International Monetary Fund (IMF) team visited Colombo on June 20 to continue discussions on an economic programme that could be supported by an IMF lending arrangement.
The IMF later said it has concluded constructive and productive discussions with
Sri Lankan authorities, but warned that the crisis-ridden island nation needs to do more on debt restructuring and step up structural reforms to address corruption vulnerabilities before a bailout package is finalised.
"The first round of discussions with the IMF has been a success but the assistance depends on the debt restructuring programme which Sri Lanka has to come up with," Wick
remesinghe said in Parliament.
Sri Lanka is currently working on the debt restructuring sustainability being prepared by legal and financial experts. "We hope to submit this report to the IMF by August. Once this is done we will be able to reach an agreement," he said. anticipated IMF facility is viewed as being slow to materialise due to the question of the island's debt sustainability.