Sri Lanka seeks IMF financial assistance as crisis worsens

Colombo: Sri Lanka’s finance minister’s aide stated on Tuesday that the country had requested immediate financial assistance from the International Monetary Fund (IMF) and that the global lender could accept it after an initial reluctance.

Island residents have taken to the streets to express their displeasure with the government’s handling of their finances and rising fuel prices, which have drained the country’s foreign currency reserves.

Official talks with the IMF began on Monday in Washington, DC, with a delegation led by Sri Lankan Finance Minister Ali Sabry, for a program the government believes will assist in topping up its reserves and attract bridging funding to pay for crucial imports of fuel, food, and medication.

“The (foreign minister) made a request for a Rapid Financing Instrument (RFI) to mitigate the current supply chain issues, yet initially the IMF was of the view that it doesn’t meet their criteria,” Sabry’s aide Shamir Zavahir said on Twitter.

However, India subsequently made representations on an RFI for Sri Lanka as well, and the IMF may consider this request due to the unique circumstances.

As Sabry told Reuters earlier this month, Sri Lanka is looking for $3 billion in funding from a variety of sources, including the International Monetary Fund (IMF), the World Bank, and India.

The country’s central bank announced last week that it was putting a hold on certain of its foreign debt repayments until a restructuring could be completed.

Protests calling for the ouster of President Gotabaya Rajapaksa have dragged on for more than a week in Colombo, the commercial hub.

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