Minister Bimal Rathnayake says the Government intends to conclude Sri Lanka’s current four-year Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF) in March 2027, while continuing normal engagement with the IMF thereafter.
Speaking during a television interview, Minister Rathnayake said the Government currently sees no need to enter into another IMF programme related to debt restructuring after the existing programme concludes.
“We will certainly exit this agreement,” he said, referring to the current programme. However, he noted that the IMF and the World Bank are international institutions and that Sri Lanka would continue to engage with them as part of the global economic system.
The four-year EFF programme was approved in March 2023 and is scheduled to conclude on March 19, 2027. According to the IMF, two reviews remain under the programme, with discussions on the seventh review currently continuing after the recent mission visit ended without a staff-level agreement.
Minister Rathnayake said the Government does not anticipate requiring another IMF debt restructuring programme, while acknowledging that Sri Lanka remains committed to existing debt repayment obligations in the coming years.
He also criticised certain aspects of the debt restructuring arrangements negotiated under the previous administration, particularly mechanisms under which payments to some creditors could vary depending on Sri Lanka’s economic performance.
“If we grow the economy, the amount of debt we have to repay increases,” he said, adding that such arrangements could reduce the resources available to pass the benefits of economic growth to the public.
The Minister also said the Government is examining existing financial market mechanisms to address potential adverse effects arising from loan conditions.
The comments come amid discussions about Sri Lanka’s future relationship with the IMF after the conclusion of the current EFF programme.
IMF Mission Chief for Sri Lanka Ivan Papageorgiou said this week that the decision on whether to request a subsequent programme rests with the Sri Lankan Government.
Following an IMF mission to Sri Lanka from September 10 to 23, the IMF said discussions with the Government on the policies and framework required to conclude the seventh review would continue “in the near term.”
(Newswire.lk)
