Sri Lanka has received the first tranche of the IMF bailout, President Ranil Wickremesinghe told parliament on Wednesday.
The crisis-ridden island nation plans to receive $330 million in aid, the first part of a nearly $3 billion rescue package approved by the International Monetary Fund on Monday.
“This sets the stage for better fiscal discipline and improved governance in Sri Lanka,” Wickremesinghe said.
The IMF bailout is expected to lead to additional support from institutions including the World Bank, Asian Development Bank and other lenders, totaling $3.75 billion. It clears the way for Sri Lanka to restructure a large portion of its $84 billion public debt.
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Sri Lanka is ready to enter into restructuring talks with bilateral and private creditors to restore debt sustainability “as soon as possible,” National Finance Minister Shehan Semasinghe said in an interview.
It is the 17th IMF bailout for Sri Lanka and the third since the country’s decades-long civil war ended in 2009.
Economic mismanagement coupled with the fallout from the COVID-19 pandemic left Sri Lanka with a severe shortage of dollars for essential imports early last year, plunging the island nation into its worst financial crisis in seven years.