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IMF Expects Sri Lanka to Soon Reach Agreements with External Creditors

During a press briefing on Thursday (06), Julie Kozack, Director of the IMF Communications Department, expressed the International Monetary Fund’s (IMF) confidence in Sri Lanka’s progress towards reaching agreements with external commercial creditors, aligning with the program parameters.

The IMF staff and Sri Lankan authorities reached a staff-level agreement on economic policies on March 21st, marking the conclusion of the second review of the economic reform program and the 2024 Article IV Consultation.

Kozack confirmed that the IMF Executive Board will convene on June 12th to discuss Sri Lanka’s second review and the Article IV Consultation.

Highlighting Sri Lanka’s macroeconomic policy reforms, Kozack commended the country’s achievements, including rapid disinflation, robust reserve accumulation, and initial signs of economic growth, all while maintaining financial system stability.

The IMF Spokesman noted strong program performance, with most quantitative and structural conditionality for the second review met or implemented with slight delays, while reforms continue in some areas.

Regarding debt restructuring, Kozack stated that negotiations with external commercial creditors are progressing, with domestic debt operations largely completed. Discussions include an MOU with the official creditor committee and final agreements with the Export-Import Bank of China. Negotiations with external bondholders and the China Development Bank are also at an advanced stage.

Kozack reiterated the IMF’s expectation of reaching agreements with external commercial creditors soon, consistent with program parameters, signifying substantial progress in debt restructuring efforts.

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