IMF to conclude talks with Sri Lanka this month over potential loan to overcome crisis

The International Monetary Fund (IMF) on Thursday stated that it is ready to conclude talks with Sri Lanka on the potential support programme to help the island nation to deal with the excruciating economic situation. IMF Communications Department Director Gerry Rice indicated that the technical discussions on said loan, which began on May 9, will end on May 24, without adding further details. Rice added that the IMF is committed to assisting Sri Lanka "in line with the IMF policies, and will engage with stakeholders in support of a timely resolution of the crisis" that is unfolding in the country.

IMF 'closely' following developments in Sri Lanka

Soon after the technical discussions over the potential IMF loan programme began in Sri Lanka with the IMF virtual mission, the apex financial body stated that it was "closely" monitoring the economic and political developments in the crisis-torn nation. The talks commenced in April and were later refurbished in view of the formation of a new government after Mahinda Rajapaksa's withdrawal from the prime ministership. Colombo has relied on international partners for help as the economic situation deteriorated pushing the country to the edge of bankruptcy. The island nation is now looking forward to a Rapid Finance Instrument (RFI) as well as a larger Extended Fund Facility (EFF) to help reverse its foreign exchange crunch, which is one of the main contributors to the economic collapse. During the last meeting, the IMF promised a sum ranging from $300 million to $500 million to help Sri Lanka emerge from the crisis.  

Sri Lanka's political turmoil escalates amid economic crisis

Sri Lanka currently has an outstanding foreign debt of $51 billion. In the wake of the worst-in-a-decade economic turmoil, Colombo said it will suspend repayment of foreign loans after its foreign currency reserves plummeted below $50 million. Sri Lanka has to pay $7 billion in foreign debts by the end of this year and $25 billion by 2026.

The island nation is grappling to meet basic supplies for its 22 million citizens amid an escalating foreign exchange deficit, which has caused prices of food and fuel prices to shoot up and led to gas shortages. According to experts, the economic crisis has resulted from manhandling of funds and ill-managed taxes.

Sri Lankan PM says the country has enough fuel to last until mid-June

After Sri Lankan parliamentarians stirred fear amongst citizens over diminishing petrol stock in the country, newly appointed Sri Lankan Prime Minister Ranil Wickremesinghe stated that the country has enough reserves to last up to mid-June. His remarks came a day after he warned the countrymen to avoid queueing outside gas stations as Sri Lankan petrol stocks dwindled. Echoing his calls, the country's Energy Minister Kanchana Wijesekera also said that Sri Lankan is on the verge of running out of petrol stock and has "no money" to replenish its supplies.

(Image: AP)