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IMF welcomes debt advisors’ appointment

  • Concludes virtual mission with SL authorities

The International Monetary Fund (IMF) has welcomed the appointment of financial and legal advisors to engage in a collaborative dialogue with their creditors as an important step towards restoring public debt sustainability but said that, since Sri Lanka’s public debt is assessed as unsustainable, approval by the Executive Board of an IMF-supported programme for Sri Lanka would require adequate assurances that debt sustainability will be restored.

This was noted by the IMF team led by Peter Breuer and Masahiro Nozaki, who conducted a virtual mission with the Sri Lankan authorities during 9-24 May on an economic programme that could be supported by an IMF lending arrangement. The IMF team met with Prime Minister Ranil Wickremesinghe at the concluding meeting, following technical discussions with the economic team led by Central Bank Governor Dr. Nandalal Weerasinghe and Secretary to the Treasury Mahinda Siriwardana. The team also met with representatives of the private sector, the financial sector, and development partners.

“The IMF team held technical discussions on a comprehensive reform package to restore macroeconomic stability and debt sustainability. The team made good progress in assessing the economic situation and in identifying policy priorities to be taken going forward. 

“The discussions focused on restoring fiscal sustainability while protecting the vulnerable and poor; ensuring credibility of the monetary policy and exchange rate regimes; preserving financial sector stability; and structural reforms to enhance growth and strengthen governance. We expect that these discussions will help the authorities formulate their reform program,” the IMF team said in a statement at the conclusion of the mission.

It added that the IMF staff will continue to monitor the economic and political situation very closely and engage with the authorities to formulate concrete measures under an IMF-supported programme, as well as broader stakeholders to support a timely resolution of the crisis and reaffirmed its commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies.