• IMF bailout has been put on hold as Sri Lanka talks with creditors to meet the global lender's condition for the facility
Crisis-hit Sri Lanka continues to seek financial assistance from major economies and institutions such as the IMF. Recently, Sri Lankan President Ranil Wickremesinghe said that the only option for the island nation to emerge from this crisis is to seek the support of global lender International Monetary Fund.
"We are well aware that the country's economy is in tatters. So I know the difficulties faced by the country. We have seen a decline in the number of employment. Inflation has increased especially in the cost of living. So the lifestyle of people is changing." Wickremesinghe said during a meeting with trade union representatives at the President's Office last week.
"These are the consequences of this economic collapse. It is useless to talk about the root causes of these issues because they have already happened. The only option we have now is to seek the support of the International Monetary Fund (IMF). Otherwise, we cannot recover." ," They said.
Additionally, the Sri Lankan President concluded debt restructuring talks with Japan and India to get out of its worst financial crisis.
The beleaguered island nation, which is trying to secure a $2.9 billion bridge loan from the IMF, is trying to get financial assurances from its major creditors - China, Japan and India - which would make it difficult for Colombo to receive a bailout package. Necessary. ,
The IMF bailout has been put on hold as Sri Lanka continues to negotiate with creditors to meet the global lender's condition for the facility.
The President said that he is looking forward to the IMF facility in 3-4 tranches.
"I want to get this country out of the crisis as soon as possible," he said.
Sri Lanka began debt restructuring talks with its creditors in September last year, as warranted by its agreement with the IMF for a $2.9 billion facility over four years.
It started talks with the IMF for a bail-out after announcing the sovereign debt default for the first time in April last year.
The IMF facility will enable the island nation to access bridging finance from the markets and other lending institutions such as the ADB and the World Bank.
"Then we will restart by the end of this year many projects which were stalled with Japan," Wickremesinghe said.
He said there is no quick fix to the current crisis and Sri Lanka has to be wary of slow growth in Europe and the US which will have a direct bearing on the country's exports.
The President's meeting with trade unions assumes significance in view of the tough economic reform measures to be implemented by the government.
Wickremesinghe recently said that he was intent on selling off state-owned enterprises to raise reserves. The government has already made clear its plans to privatize Sri Lanka Telecom and Sri Lankan Airlines.
Sri Lanka will be hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, fueled by a severe shortage of foreign exchange reserves, sparking political turmoil in the country that has led to the all-powerful Rajapaksa family Was expelled.
Providing a much-needed lifeline to a needy neighbour, India extended nearly $4 billion in financial aid to Colombo during the year. In January, India announced a $900 million loan to Sri Lanka to build up its depleted foreign reserves as the financial crisis unfolded.
Later, it offered Sri Lanka a $500 million line of credit for the country's fuel purchases. The credit line was later enhanced to $700 million considering the gravity of the situation.
No comments:
Post a Comment