Courtesy The Island

The IMF could finalise Sri Lanka’s financing package within three weeks of the country’s main bilateral creditors formally informing the IMF that they would help Sri Lanka restructure its debt, Governor of the Central Bank, Dr. Nandalal Weerasinghe, said on Thursday appearing on a TV programme.

Dr. Weerasinghe said that Sri Lanka had already provided adequate information to the country’s main bilateral creditors and they were in a position to make an informed decision about the role they could play in making Sri Lanka’s debt sustainable.

Sri Lanka’s ability to secure an IMF package depends on the country’s ability to obtain assurances from our bilateral creditors. We have made good progress with the Paris Club, India, and China. We have had two formal meetings with all donors, and we have given all the information. We have kept providing them with information, through the IMF and our advisors, and the creditors now have sufficient information to decide on what kind of contribution they can make to restore debt sustainability,” he said.

Dr. Weerasinghe said that the next step would be getting financial assurances from all creditors, either collectively or bilaterally, based on what type of relief they would provide. Then the creditors could tell the IMF formally that they are willing to help Sri Lanka reach the debt targets that the IMF has set up, he said.

Then, we can go to the board and approve the programme we have set up. The IMF needs a maximum of three weeks to get the programme approved. We were making progress and

we were hoping for an IMF programme by December. However, there was some little delay from some of the creditors because of internal issues. If we had got the assurances in November, we were targeting the IMF board meeting which is to be held on 19 December. But we have missed that,” he said.The Central Bank Governor said that some partners have expressed willingness to support Sri Lanka. Among them are China, India, and the Paris Cub.

When they tell the IMF that they are willing to help formally, we are almost done. We are almost there in my view. Once we get that assurance, the IMF needs a maximum of two to three weeks to prepare all the board papers, circulate with the board members, go to the board and get the programme approved. For example, if we can get the creditors to write to the IMF this month, the IMF can approve this programme in January. The IMF board usually meets two to three days a week,” he said.

Responding to a question whether Sri Lanka is versed in dealing with such matters, Dr. Weerasinghe said working with the IMF is not new to the country. However, previous dealings with the IMF have not been this complex, he said.

That is we did not have a debt crisis. In the past we have gone to the IMF to address Balance of Payment crises, for financing support and also for advice on the overall macro framework. In this case, we also have to also ensure that our debt is sustainable. That is the additional complication,” he said.