IMF holds talks with Sri Lanka; agrees to provide $300-$600 million loan to handle crisis

As Sri Lanka continues to face economic turbulence, the worst ever since the country became independent in 1948, the International Monetary Fund (IMF) on Saturday assured to help the country with an amount of $300 million to $600 million. According to IMF, the island nation will receive a hefty amount from the World Bank over the next four months.

The major development came after the delegation of Sri Lankan ministers held negotiations with the international financial institution during the 2022 IMF and World Bank Spring Meetings in Washington, DC. According to the statement released by the IMF, the Sri Lankan government will spend the sanctioned amount on the purchase of medicines and other essential items.

"During April 18-22, the Sri Lankan delegation and the IMF team had fruitful technical discussions on the authorities' request for an IMF-supported program," the IMF said in a statement.

"The discussions covered recent economic and financial developments in Sri Lanka, the need for implementing a credible and coherent strategy to restore macroeconomic stability, and the importance of stronger social safety nets to mitigate the adverse impact of the current economic crisis on the poor and vulnerable," added the statement.

Sri Lanka crisis

It is worth mentioning that the island nation has been experiencing its worst economic crisis in history. The country has huge debt obligations and dwindling foreign reserves, and has been struggling to pay for imports, causing a shortage of essentials. Citizens were forced to stand in long fuel lines, cooking gas, and medicines.

The citizens who have been struggling to manage their expanses were continuously protesting against the ruling government, seeking the resignation of Prime Minister Mahinda Rajapaksa, who heads an influential clan and has been in power for most of the past two decades. The protest turned more violent after a person was killed and several others were injured during the protest on Tuesday.

India to help the neighbouring island nation

Though the ruling government assured the country to conduct a fair investigation into the alleged killing, citizens were not in the mood to loosen its tamper. In order to avert the current crisis, the country's Finance Minister Ali Sabri, during a video conference on Saturday, said the Sri Lankan delegation had held a "fruitful meeting" with IMF Managing Director Kristalina Georgieva and the World Bank.

According to Sabri, Sri Lanka had knocked on the doors of India and China for help and added New Delhi has assured to provide $500 million in order to purchase fuel. Besides, he also affirmed that the country has been negotiating for an additional amount of $1 billion from New Delhi. 

Image: AP/ANI