IMF to start talks with Sri Lanka on loan request in coming days | Investment News

WASHINGTON (Reuters) – The International Monetary Fund will begin discussions with Sri Lankan authorities on a possible loan program in the coming days, IMF spokesman Gerry Rice said on Thursday, as the Asian country seeks to avoid a serious economic crisis.

Rice said talks would continue when Sri Lankan Finance Minister Basil Rajapaksa visits Washington for the IMF and World Bank spring meetings next month.

A 70% drop in foreign exchange reserves since January 2020 has left Sri Lanka struggling to pay for essential imports, including food and fuel, leading to growing unrest and even military deployments at gas stations.

“The Sri Lankan authorities have expressed interest in an IMF-backed financial program,” Rice said at a regular IMF briefing. “We expect to initiate these discussions on the program with the Sri Lankan authorities … approximately within the next few days.”

Rice said the IMF would update its forecast for Sri Lanka when it releases its new World Economic Outlook next month, but gave no further details.

He confirmed that Rajapaksa would travel to Washington next month for talks with IMF officials, as Reuters reported last week.

Sri Lanka – which has to pay around $4 billion in debt this year – will also seek World Bank help after entering an IMF program, Reuters reported, citing two sources familiar with the matter.

(Reporting by Andrea Shalal; Editing by Bernadette Baum)

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