Colombo, Sri Lanka: After defaulting on its debt last year, Sri Lanka is making strides towards economic recovery in discussions with the International Monetary Fund (IMF). A visiting IMF staff mission is currently in Colombo to assess progress and ensure adherence to agreed-upon program targets and commitments.

“This is not a formal review mission, but rather a fact-finding and technical mission,” clarified IMF spokesperson Julie Kozack. “The focus is on recent developments and following up on program targets and commitments.

Central to Sri Lanka’s recovery is its ongoing debt restructuring. After years of operating a modified inflation targeting regime without a clean float and inflationary domestic operations, the country was plunged into serial currency crises and ultimately defaulted. Now, the government is actively engaging with creditors to restructure both external commercial and official debts.

“Finalizing negotiations with external commercial creditors and implementing agreements with official creditors are the next crucial steps,” emphasized Kozack.

State Minister for Finance Shehan Semasinghe confirmed in December that discussions with bondholder advisors are already underway. Additionally, President Ranil Wickremesinghe received encouraging words from Japanese Finance Minister Suzuki Shunichi, who commended the country’s economic progress and lauded the President’s leadership.

While this IMF mission is not a formal review, it signals a positive step in Sri Lanka’s journey towards economic stability. Successfully restructuring its debt and meeting program targets will be crucial for accessing vital IMF funding and attracting further international support.

Related Articles