The International Monetary Fund has confirmed that it intends on beginning discussions with Sri Lanka on a program to support the country.
Commenting on the development, IMF spokesman Gerry Rice said “The authorities have indicated that they are actively considering an IMF-supported program and we will discuss with the authorities how best we can assist Sri Lanka going forward, including during the Minister of Finance’s visit to Washington in April.”
On Wednesday, President Gotabaya Rajapaksa in his national address announced that he had given the go ahead for an IMF program after meeting IMF officials in Colombo earlier in the week.
The IMF has already called for tighter monetary policy to stop liquidity injections which create forex shortages.
The IMF has scrutinized Sri Lanka’s economy in a staff report which has been submitted to the board, following annual Article IV consultations.
The full report has not been made public, but key conclusions, include warnings that the economy could implode unless actions were taken to halt monetary instability.
IMF spokesman Gerry Rice has also highlighted the urgent need of implementing a credible and coherent strategy to restore macroeconomic stability and debt sustainability.
Meanwhile, the Leader of the United National Party, Former Prime Minister Ranil Wickremesinghe says going to the International Monetary Fund (IMF) for assistance is imperative.
Former Prime Minister Wickremesinghe has highlighted however that the IMF alone will not be able to solve the problems in the country.
Speaking to media, the former Premier noted the IMF would provide a foundation that would allow the country to seek the assistance of other nations.
The former Prime Minister said after the World War, several countries sought IMF support to overcome domestic economic troubles.
Former Premier Wickremesinghe noted even the likes of Britain and India have obtained IMF assistance in the past.
The former Premier said due to the depletion of foreign reserves and state revenue, the IMF assistance is necessary but it should be backed up through the implementation of long-term reform agendas.
The UNP Leader added that the government missed several opportunities to seek IMF assistance previously, however noted that it is still very much the option that will help Sri Lanka come out of the prevailing crisis.
The former Primer added the country’s economy should be stabilised by prioritising exports, fiscal policy changes and other recommendations of the IMF.
Former Prime Minister Ranil Wickremesinghe stressed that since IMF funds programmes, it is important that the present administration formulate a compressive framework that can be followed for at least 10 years.