Initial agreement with IMF expected to take place in two months – CBSL Governor

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A staff-level agreement with the International Monetary Fund (IMF) is likely to be reached within the next two months, Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe said.

Addressing the Ceylon Chamber of Commerce yesterday (28), Dr.Weerasinghe noted that encouraging progress had been made towards establishing a macro-fiscal policy framework, adding that measures will be implemented to address urgent economic concerns.

The measures include introducing regulations to encourage USD flows currently transacting in the informal market to be channeled through the formal banking system.

As a result of policy measures already introduced by CBSL and the government, he is of the view that expenditure on imports will be declining further to more sustainable levels.

The Governor also highlighted the need to strengthen the social safety net with the rising cost of living. To this effect, multilateral agencies such as the World Bank will be looking to reallocate funds committed to projects towards assisting vulnerable segments of the population, he stated.

While expediting IMF negotiations and implementing sustainable economic policy reforms being the main priority, he added that IMF action will continue irrespective of the political landscape, and also stressed that all creditors will be treated equally in the debt-restructuring process. The Governor sought the assistance of the private sector in successfully implementing measures to stabilize the economy.

However, Weerasinghe noted that despite external debt restructuring remains a top priority for the Sri Lankan government, domestic debt in the form of Government securities and Sri Lanka Development Bonds will not be restructured.