The International Monetary Fund (IMF) says there is a strong expectation that Sri Lanka will soon reach agreements with external commercial creditors consistent with program parameters.
“So overall we assess that there has been sufficiently strong progress on the debt restructuring front,” Julie Kozack, Director of the IMF Communications Department, said during a press briefing on Thursday (06).
On March 21st, IMF staff and the Sri Lankan authorities reached staff-level agreement on economic policies to conclude the second review of the economic reform program and also the 2024 Article IV Consultation.
Kozack confirmed that on June 12th, the IMF Executive Board will meet to discuss Sri Lanka’s second review and the Article IV Consultation.
“In Sri Lanka, we do see macroeconomic policy reform starting to bear fruit.” Commendable outcomes include rapid disinflation, robust reserve accumulation, and initial signs of economic growth, while preserving stability of the financial system, she said responding to questions on Sri Lanka.
The IMF Spokesman said that the program performance is strong with most quantitative and structural conditionality for the second review met or implemented with delay, and reforms are still ongoing in some areas.
“The next steps on the debt restructuring are indeed to conclude negotiations with external commercial creditors and to implement agreements in principle with the official creditors. The domestic debt operations are largely completed. Debt restructuring discussions are continuing.”
More specifically, she said the authorities have been holding extensive discussions with external official creditors regarding an MOU with the official creditor committee and the final agreements with the Export Import Bank of China.
Discussions with external bondholders continue with the aim of reaching agreements in principle soon, Kozack said, adding that negotiations with the China Development Bank are also at an advanced stage.
“There is a strong expectation that agreements with external commercial creditors consistent with program parameters will be reached soon. So overall we assess that there has been sufficiently strong progress on the debt restructuring front.”
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