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IMF hopes for a resolution to situation in Sri Lanka to resume high level discussions soon

 The Internationals Monetary Fund says the ongoing crisis situation in Sri Lanka is of grave concern and hopes for a resolution of the current situation to resume the dialogue on an IMF supported program as soon as possible.

IMF Director of Communications Gerry Rice at an online media briefing held Thursday said the situation in Sri Lanka is of deep concern and the IMF is closely monitoring the political and the social developments in the country.

“So, like everyone else we are, of course, deeply concerned about the ongoing crisis, it’s impact on the Sri Lankan people, and particularly the poor and the vulnerable groups in Sri Lanka. Again, like everyone else, we’re closely monitoring the political and the social developments there.”

Recalling that an IMF staff team visited Colombo late last month and held discussions with the Sri Lankan authorities, the IMF Director of Communications said they had constructive discussions on a set of economic policies and reforms that could be supported, potentially by an IMF program.

However, Rice said IMF doesn’t have a program with Sri Lanka right now. “But we were discussing what could be a program.”

According to the official, IMF is able to continue discussions as they have technical counterparts still in some of the key ministries in the Central Bank and the Ministry of Finance

“The high-level discussions with the authorities that we would need to begin discussions on a program, we hope again, that these would be able to resume as soon as possible. So, you know, looking to do all we can in just an extraordinary difficult situation,” rice told the reporters.

Rice said, the IMF does not have anything about emergency or bridge financing and hopes to resume the discussions as soon as the situation has stabilized a bit. However, as Lanka’s public debt is assessed as unsustainable, the IMF board need assurances on debt sustainability.

“And, of course, an important part of those discussions is the debt situation. Sri Lanka’s public debt is assessed as unsustainable and as is the case with every IMF program, not just the case of Sri Lanka, for approval by the Board. And we are not at that stage, but for approval by the Board, a program would require adequate assurances on debt sustainability.“

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