Sri Lanka to brief creditors on IMF deal

Colombo : The Sri Lankan government will virtually brief all its external creditors on September 23 on the deal agreed with the International Monetary Fund (IMF) for the economic recovery and the next steps in the debt restructuring process. On September 1, the IMF reached a staff-level agreement to support Sri Lanka’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about USD 2.9 billion.Sri Lanka is going through its worst economic crisis since its independence in 1948 which was triggered by a severe paucity of foreign exchange reserves.’Sri Lanka will make an online presentation to external creditors on September 23 updating them on a deal agreed with the International Monetary Fund and recent economic developments,” Clifford Chance, the debt restructuring adviser, said in a statement on Saturday.The Sri Lankan Finance Ministry will update creditors on recent macro-economic developments, the objectives of the IMF package, and the next steps in the debt restructuring process.The IMF while announcing its willingness to enter a staff-level agreement at the end of August said that agreement with creditors was the key to the facility.In mid-April, Sri Lanka declared its international debt default due to the forex crisis. The country owes USD 51 billion in foreign debt, of which USD 28 billion must be paid by 2027.The worsening forex situation affected the ability to fund importing fuel and essentials, triggering massive waves of public protests in the country. An uprising in mid-July forced the resignation of then President Gotabaya Rajapaksa.Sri Lanka has to get assurances from creditors about their willingness to restructure debt for the International Monetary Fund to unlock credit from the agency and others.