PM briefs IMF MD

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As Finance Today exclusively reported last week Prime Minister (PM) Ranil Wickremesinghe and the Managing Director (MD) of the International Monetary Fund (IMF) Crystalina Giorgio had a telephone conversation on Tuesday evening regarding the current economic situation in the country, the Prime Minister’s Media Unit said.

The PM requested the IMF staff level delegation to visit Sri Lanka as soon as possible to finalise the staff level agreement with the IMF.

The PM has explained that the future Sri Lanka’s donor community discussions depend on the conclusion of staff level agreement with the IMF.

The IMF MD expressed her willingness to assist
Sri Lanka during these difficult times. (IG)

Near Term Priorities towards an IMF Funded Programme

Progress Thus Far (completed)

1. Monetary Policy tightened, controlling demand side pressures of the economy.

2. Illicit fund transfer mechanisms actively ceased with the assistance of the Special Task Force (STF).

3. Near Term bridge financing for fuel and essentials from India to reduce Fuel allied queues in the near term.

4. Agri segment’s performance would largely be impacted as a result of the production bottle neck (caused by the chemical fertiliser ban that was reversed recently) during the Yala cultivation season –India pledged assistance on 2 June 2022 in providing fertiliser to minimise supply side Agri inflation in the near term.

Near Term Priorities (to do list )

1. Forex liquidity however continues to remain challenged in the near term although proceeds from the privatisation of inefficient / non-strategic State-owned enterprises may improve external liquidity in 2H2022E – 1H2023E.

2. Further financing could be expected from multilateral agencies such as the World Bank and the ADB in the near term following some tangible progress in the proposed debt restructuring (to be completed by Nov 2022) and the economic recovery programmes.

3. Finally, recently appointed financial and legal advisers (Lazzard and Clifford Chance ) to progress on the debt restructure to be completed by Nov 2022 resulting in the IMF EFF programme of US$3 billion materialising for Sri Lanka.

(Source: CT CLSA Securities)