State Minister for Finance Shehan Semasinghe said that the agreement entered into with the IMF and the staff-level agreement reached following the First Review of Sri Lanka’s Extended Fund Facility Arrangement will support to settle arrears owed to multilateral creditors while expediting the debt restructuring process.
He said that Sri Lanka is poised to receive the second tranche of US$ 330 million subsequent to the approval of this Staff-Level Agreement by the IMF Executive Board.
State Minister Semasinghe was addressing a press conference at the Presidential Media Centre (PMC) on Friday, October 20 on “Collective path to a stable country”.
He said, “We successfully reached the Staff-level Agreement on Thursday, a crucial step in securing the second tranche under our agreement with the IMF through the Extended Fund Facility.
Prior to this achievement, a team from the IMF conducted an extensive two-week review in Sri Lanka, engaging in detailed discussions on various topics. Given the complexity and scope of the discussions, it was not feasible to reach an agreement instantly.”
“Subsequently, we continued our deliberations during the annual meeting of the IMF and the World Bank in Morocco. There, we engaged in in-depth discussions to clarify various aspects. Even then, we found it necessary to seek further clarifications on various matters, leading to continued discussions through online platforms when we return to Sri Lanka,” he said.
The State Minister said the agreement, as it stands today, is the result of the concerted efforts and dialogue involving officials from the IMF, the Central Bank and the Ministry of Finance.
Despite the favourable position, Sri Lanka held with the IMF in March 2023, disruptions and misinterpretations arose in recent weeks. “We categorically said within and outside Parliament that there is no reason to fear the approval of the executive committee on the release of the second installment. As a Government, we maintained our confidence,” he said.
State Minister Semasinghe said that the staff-level agreement, marking the completion of the first review of the program with the IMF, plays a pivotal role in facilitating the payment of arrears to multilateral creditors and expediting the process of debt restructuring.
He said that Sri Lanka is set to receive the second tranche of US$ 330 million following the approval of the IMF Executive Board.
The State Minister acknowledged the leadership and the guidance of President Ranil Wickremesinghe in these endeavours, and the contributions of officials, including the Governor of the Central Bank and the Secretary to the Ministry of Finance, in making these achievements possible.
He said that the Staff-Level Agreement will enable the World Bank, Asian Development Bank and other multilateral financial institutions to make the remaining payments, further expediting debt restructuring efforts with international partners.
The State Minister expressed optimism that the agreements related to debt restructuring may soon be finalised, aligning with the Government’s objectives of reducing corruption and increasing transparency.
He cited the IMF praise for Sri Lanka’s economic progress and added that this reflects international confidence in the country’s economic prospects.
