IMF staff to visit crisis-hit Sri Lanka next week to resume aid talks

IMF staff to visit crisis-hit Sri Lanka next week to resume aid talks

IMF officials will visit Colombo from August 24-31 to discuss Sri Lanka’s economic policies.

Washington:

The IMF announced on Friday that a team would travel to Sri Lanka next week to resume aid talks that stalled amid the unrest that led to the resignation of the country’s president.

The island nation defaulted on its $51 billion foreign debt in April and is seeking help from the International Monetary Fund after months of food, fuel and medicine shortages.

Amid runaway inflation, the country’s central bank warned on Thursday that the economy could suffer a record contraction of more than 8% this year with inflation peaking at 65%.

Staff at the Washington-based crisis lender plan to travel to Colombo from August 24-31 “to continue discussions with Sri Lankan authorities on economic and financial reforms and policies,” the IMF said in a statement.

“The objective is to move towards reaching an agreement at staff level” on a “short-term” funding plan, the IMF said.

However, the country’s public debt is “unsustainable”, meaning that any IMF lending program “would require adequate assurances from Sri Lanka’s creditors that debt sustainability will be restored”.

Official talks on a new package for the cash-strapped nation began in June, but were sidetracked by political upheaval that forced former President Gotabaya Rajapaksa to flee the country, amid dramatic scenes of occupying protesters the presidential palace.

Rajapaksa is accused of mismanaging the island nation’s economy to the point of running out of foreign exchange to fund even the most essential imports, causing severe hardship for its 22 million people, with four out of five Sri Lankans skipping meal.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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