IMF LOAN IN THE BALANCE?

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BY Paneetha Ameresekere

Sri Lanka being able to obtain a new International Monetary Fund (IMF) loan, to overcome its current economic difficulties, is in doubt because of debt already owed by Sri Lanka to the IMF.

The IMF, in their ‘Article IV Consultations with Sri Lanka’, made public on their website on Friday, to quote relevant excerpts said, “Sri Lanka’s capacity to repay the Fund (MF) needs to be closely monitored. Credit already outstanding to the Fund stood at SDR902 million (US$1.3 billion) at end-2021, with payments due averaging $170 million over 2022-29. While the credit outstanding and the payments due are not large (1.5 per cent of GDP at end-2021 and around one per cent of total exports over 2022-27, respectively) and Sri Lanka has kept a sound track record of repaying debt, its precarious reserves position, debt overhang as well as persistent fiscal and balance of payments (BoP) financing shortfalls pose high risks to Sri Lanka’s capacity to repay the Fund.”

An email sent to IMF’s Press Officer for this Region, Ting Yan with a copy to IMF’s Team Leader for Sri Lanka Masahiro Nozaki to clarify IMF’s position in respect of the above on Saturday, however, went unanswered at the time of writing, yesterday (Sunday).