To get out of the crisis, Sri Lanka must adhere to the IMF program: Governor of the Central Bank

 To get out of the crisis, Sri Lanka must adhere to the IMF program: Governor of the Central Bank

To get out of the crisis, Sri Lanka must adhere to the IMF program: Governor of the Central Bank

Weerasinghe was restating remarks made on December 17 by President Wickremesinghe.

According to the World Bank, "fundamental reforms" are required in Sri Lanka in order to bring macroeconomic stability back.

The second tranche of US$ 337 million to be released to Sri Lanka was authorized earlier this month by the International Monetary Fund (IMF).

In response to allegations made by opposition parties that they were renegotiating the conditions for the IMF's US$2.9 billion rescue package, Weerasinghe was asked whether the island country was prepared to renegotiate the terms of the four-year program. will converse with.

Here, there are no other options. Weerasinghe told reporters on Friday, "We are here (in bankruptcy) because we tried alternatives."

"Let's suppose the debt restructuring time is ten years. If they (the opposition) want to modify it, creditors might say we no longer support it. We have to follow the same course. Weerasinghe said, "We would have to repay US$6 billion year if we were to terminate the scheme.

Weerasinghe was restating the remarks made by President Wickremesinghe on December 17. The Finance Minister, Wickremesinghe, said, "There was no alternative but the IMF program to pull the cash-strapped island government out of economic bankruptcy." The opposition vehemently opposed the revisions.

Samagi Jana Balavegaya (SJB), the main opposition party, has promised to renegotiate the IMF bailout, arguing that the conditions the President accepted to have put the people in financial difficulties.

In his capacity as Finance Minister, Wickremesinghe led the IMF discussions and pushed through strict economic measures such higher utility and personal taxes.

Furthermore, starting in January 2024, a broader range of goods would be subject to value-added tax, including gasoline, which was previously excluded from the tax.

Despite the fact that Wickremesinghe's plan to force an IMF bailout would cause immediate problems, he maintains that it was the only option to provide long-term assistance.

According to Weerasinghe, the head of the central bank, every IMF evaluation involves reconsideration. "After the first review, there were talks again as well as will be reviewed during the second review also," he said.

Weerasinghe discussed the help the island's economy has gotten from the World Bank and Asian Development Bank (ADB) since the signing of the IMF deal, stating that maintaining the IMF program was crucial to obtaining international support to tackle the issue.

Following the most severe economic crisis in its history in 2022, which severely depleted its foreign currency reserves, Sri Lanka was given what the World Bank referred to as a "fundamental reform" in order to restore macroeconomic stability and lessen the burden on the poor. Follow the instructions listed below. and weakened by a recovery spearheaded by the private sector.