IMF to resume Sri Lanka's loan discussion in February, says Lagarde

Colombo

THE International Monetary Fund will resume discussions with Sri Lanka in February for further disbursing of part of a US$1.5 billion loan, the lender said, after a political crisis led to talks being delayed by three months.

Sri Lanka government leaders had agreed to stick to a reform programme following a meeting with IMF managing director Christine Lagarde in Washington on Tuesday, the bank said in a statement.

Sri Lanka is struggling to restore investor confidence and pay down its debt after it was plunged into political turmoil in October when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament.

A court later ruled the move was unconstitutional, and Mr Wickremesinghe was reinstalled as premier.

"The IMF remains ready to support the Sri Lankan authorities in these endeavours and an IMF team is scheduled to visit Colombo in mid-February to resume programme discussions," Ms Lagarde said after meeting with Finance Minister Mangala Samaraweera and the central bank governor Indrajit Coomaraswamy.

"We discussed the challenging economic environment and the policy priorities for the country. The authorities stressed Sri Lanka's continued commitment to their economic reform agenda under the IMF-supported programme," Ms Lagarde said.

A series of credit rating downgrades have made it harder for Sri Lanka to borrow as it faces record high repayments of US$5.9 billion this year, US$2.6 billion of which fall due in the first three months.

On Tuesday, the island nation's junior finance minister Eran Wickramaratne told Reuters that Sri Lanka is considering an offer from Bank of China for a loan of US$300 million, which could be raised to US$1 billion, to help it meet repayments in coming months. REUTERS