IMF team to visit Colombo next week to discuss assistance programme

COLOMBO: The IMF has reaffirmed its commitment to help crisis-hit Sri Lanka as a team from the global lender is set to visit Colombo from Monday to continue discussions on a possible bailout programme to support the island nation's economic recovery.

The economic crisis in Sri Lanka has prompted an acute shortage of essential items like food, medicine, cooking gas and fuel across the island nation.

"The International Monetary Fund (IMF) team is visiting Colombo during June 20-30 to continue discussions on an economic programme that could be supported by an IMF lending arrangement, building on the progress made during the May 9-24 virtual mission," the international lender has said in an email while responding to local press inquiries.

"We reaffirm our commitment to support Sri Lanka at this difficult time, in line with the IMF's policies," it said as the island nation is facing its worst economic crisis since independence from Britain in 1948.

Sri Lanka seeks an IMF support facility worth USD 4 to 5 billion.

The government has said it needs USD 5 billion this year in support from the international community, including the IMF.

Sri Lanka defaulted on its foreign debt for the first time in its history last month.

The nearly bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026. Sri Lanka's total foreign debt stands at USD 51 billion.

Prime Minister Ranil Wickremesinghe said a deal with the IMF would be key to the island nation receiving bridging finance.

President Gotabaya Rajapaksa had admitted that the country should have sought IMF assistance much earlier.

The Indian credit lines since January this year have provided a lifeline to Sri Lanka amidst growing public dissent over the worsening economic conditions.