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IMF Expects Sri Lanka to Secure Deal with Commercial Creditors by Second Review Completion

The International Monetary Fund (IMF) declared on Thursday a “strong expectation” that Sri Lanka will finalize a deal with its commercial creditors by the conclusion of the IMF’s second review. Sri Lanka is engaged in discussions with bondholders to restructure approximately USD 12 billion in debt, a crucial move in its endeavor to recover from a severe financial crisis.

IMF spokesperson Julie Kozack conveyed during a press briefing, “There is a strong expectation that agreements with commercial creditors consistent with program parameters will be reached by completion of the second review.”

Although the IMF reached a staff-level agreement with Sri Lanka on its second review of a four-year bailout program late last month, it still awaits approval from the IMF’s board.

Kozack additionally remarked that macroeconomic policy reforms in Sri Lanka are beginning to yield positive results. Notable achievements include rapid disinflation, robust reserve accumulation, and initial indications of economic growth, all while maintaining the stability of the financial system.

Furthermore, she emphasized that public finances have improved following significant fiscal reforms, highlighting the importance of sustaining this reform momentum.

–with inputs from Reuters

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