Sri Lanka economic crisis: IMF still in touch with govt officials
“We hope for a resolution of the current situation that would allow for our resumption of a dialogue on an IMF supported program,” IMF spokesman Gerry Rice said in a scheduled press briefing.
Washington: The International Monetary Fund (IMF) is still in contact with officials at technical levels within the Sri Lankan government and hopes to be able to resume discussions with higher-level officials, an IMF spokesman said on Thursday.
“We hope for a resolution of the current situation that would allow for our resumption of a dialogue on an IMF supported program,” IMF spokesman Gerry Rice said in a scheduled press briefing.
Sri Lankan president Gotabaya Rajapaksa fled to the Maldives on Wednesday to escape a popular uprising over his family’s role in a crippling economic crisis, and was last in Singapore from where he sent a resignation letter.
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Rice said the IMF still has technical counterparties in the central bank and the ministry of finance, and hopes to be able to have high-level discussions with the authorities to begin discussions on a programme “as soon as possible”.
He said any new loan programme for Sri Lanka would require adequate assurances on debt sustainability.
Meanwhile, US treasury secretary Janet Yellen said on Thursday that China is a “very important” creditor of Sri Lanka and it would likely be in the interest of both countries if China participated in restructuring Sri Lanka’s debt.
Yellen said she would urge other members of the Group of 20 major economies to put pressure on China to be more cooperative in long-stalled efforts to restructure the debts of countries in debt distress, including Sri Lanka.
Sri Lanka owes at least $5 billion to China although some estimates put it at almost twice that amount. India has also lent it $3.8 billion and Japan is owed at least $3.5 billion, according to the IMF, with another $1 billion due to other rich countries.
“Sri Lanka is clearly unable to repay that debt, and it’s my hope that China will be willing to work with Sri Lanka to restructure the debt,” Yellen told a news conference on the sidelines of a meeting of G20 finance officials on the Indonesian island of Bali.
The economy of the country of 22 million people began to show cracks in 2019 after large tax cuts by Rajapaksa’s government drained the country’s coffers. The pandemic then shattered the lucrative tourism industry, and rising global prices have left Colombo struggling for essentials such as fuel, medicine and food.
