World News | Sri Lanka receives first IMF bailout

COLOMBO, March 23 (PTI) Sri Lanka’s president said he had received US$330 million as the first tranche of an IMF bailout, which would lead to better “fiscal discipline” and “improvement” in the debt-ridden country. Governance” paves the way for Ranil Wickremesinghe.

The International Monetary Fund (IMF) on Tuesday approved a $3 billion rescue package to help Sri Lanka overcome the economic crisis and catalyze financial support from other development partners, a move welcomed by Colombo as a “historic milestone” at the critical time “.

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Years of mismanagement and a raging pandemic have unleashed a catastrophic economic and humanitarian crisis that has hit Sri Lanka hard.

The country’s finance minister, Ranjith Siyambalapitiya, was quoted by the Lanka Daily Mirror as saying that the cash-strapped country has received the first tranche of US$330 million from the IMF’s Extended Fund Facility (EFF).

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“This sets the stage for better fiscal discipline and improved governance in the country,” President Wickremesinghe told parliament on Wednesday.

The IMF’s executive board on Monday approved a 48-month extension for 2.286 billion special drawing rights (about $3 billion).

The Special Drawing Right (SDR) is a supplementary foreign exchange reserve asset defined and maintained by the International Monetary Fund.

The EFF-backed program aims to restore Sri Lanka’s macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, preserve financial sector stability, and strengthen governance and growth potential, the IMF said.

The plan will enable Sri Lanka to secure up to $7 billion in financing from the International Monetary Fund, International Financial Institutions (IFIs) and multilateral organisations, a statement said.

Sri Lanka announced last April it would default on its debt for the first time in its history, the worst economic crisis since independence from Britain in 1948, and a shortage of foreign currency sparked public protests.

Months of street protests led to the ouster of then-president Gotabaya Rajapaksa in mid-July.

Rajapaksa started talks with the IMF after refusing to seek support from global banks.

Sri Lanka took painful economic measures, such as tax hikes and higher utility rates, to unlock the scheme.

Unions and opposition groups organized protests against the measures.

(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)