COLOMBO (NewsRadio); The government and the International Monetary Fund are scheduled to sign a staff level agreement for the second tranche of the IMF programme on Tuesday.
President Ranil Wickremesinghe who was in the United States to attend the 78th session of the United Nations General Assembly will finalize the agreement on behalf of the government.
Meanwhile, the IMF team who commenced discussions last week as part of the first review of the Extended Fund Facility arrangement reached certain agreements on the opening day.
During the meeting, Sri Lanka was represented by Chief of Staff to the President Sagala Ratnayake, State Minister of Finance Shehan Semasinghe and officials of the Ministry of Finance and the Central Bank of Sri Lanka.
During the discussion that took place at the Presidential Secretariat, the IMF team acknowledged the progress made by Sri Lanka in terms of reforms and achieving targets while also indicating some areas must be improved at a faster rate including measures to increase the revenue of the government.
The IMF team has noted that since Sri Lanka had failed to meet certain targets of previous IMF agreements, stricter conditions had to be imposed this time.
The IMF team is currently holding discussions with various parties ahead of signing the staff level agreement for the second tranche of around USD 338 million.
Both the IMF and local authorities have indicated the agreement will also facilitate the restructuring of international debt with the participation of primary lenders such as India, Japan, China and the Paris Club.
In March this year, the IMF Executive Board approved a 48-month extended arrangement under the Extended Fund Facility of SDR 2.286 billion (about USD 3 billion) to support Sri Lanka’s economic policies and reforms.
The objectives of the EFF-supported program are to restore macroeconomic stability and debt sustainability, safeguarding financial stability, and stepping up structural reforms to unlock Sri Lanka’s growth potential.
The IMF said all program measures are mindful of the need to protect the most vulnerable and improve governance.
The Executive Board’s decision enabled an immediate disbursement equivalent to SDR 254 million (about USD 333 million) in March.
Following the first review after considering the programme’s performance until end-June, it will be presented to the IMF Executive Board.
If it is approved by both the staff and the Executive Board, it will result in another disbursement. Meanwhile, following the first IMF review, Sri Lanka is expected to receive around USD 338 million.