By Uditha Jayasinghe
COLOMBO (Multibagger) - Sri Lanka is set to engage in detailed discussions with the IMF regarding the framework of a $2.9 billion bailout program during the lender's annual meetings in Washington later this month, as announced by the country's cabinet spokesperson on Tuesday.
The delegation representing Sri Lanka at the meetings will be led by the central bank governor, treasury secretary, and financial advisers to President Anura Kumara Dissanayake, Minister Vijitha Herath informed reporters at a news conference.
President Dissanayake stated that Sri Lanka will promptly initiate talks with the IMF for the third review of its bailout program, which upon approval, will result in the disbursement of a fourth tranche amounting to about $337 million.
An IMF team will be visiting Colombo for a three-day visit starting Wednesday to discuss the latest economic developments and reforms under Sri Lanka's economic program supported by the IMF, according to a spokesperson for the lender.
"We believe that an assessment of the IMF program is necessary, but this will not be conducted during the current delegation's visit," Herath mentioned, clarifying that the IMF delegation's visit this week is merely a courtesy call.
The IMF and World Bank's 2024 annual meetings are scheduled to take place from Oct. 21-26.
Following the election of leftist leader Dissanayake in September, millions of Sri Lankans expressed confidence in his anti-corruption promises and commitment to strengthening the country's fragile economy.
While investors have expressed concerns about Dissanayake's intentions to renegotiate the terms of the IMF bailout potentially causing delays in future disbursements, the president reassured last week that the program will continue under his administration.
Analysis:
In summary, Sri Lanka is in discussions with the IMF regarding a $2.9 billion bailout program, with talks scheduled during the lender's annual meetings in Washington. The approval of the third review could lead to the disbursement of a fourth tranche of $337 million. President Dissanayake's commitment to the IMF program has somewhat alleviated investor concerns, despite fears of renegotiation causing delays. This development will have significant implications on Sri Lanka's economy and financial stability, highlighting the importance of international support and cooperation in addressing the country's economic challenges.