IMF approves $206 Million emergency support for Sri Lanka after Cyclone Ditwah

The International Monetary Fund (IMF) has approved SDR150.5 million (about US$206 million, 26 percent of quota) in emergency funding for Sri Lanka to help address urgent financial pressures caused by Cyclone Ditwah, which struck the country on November 28, 2025.

The catastrophic cyclone claimed more than 600 lives, displaced over 100,000 people, and destroyed critical infrastructure, creating severe humanitarian, fiscal, and balance-of-payments needs. Flooding and landslides devastated livelihoods across the country, making immediate emergency support crucial.

The IMF said the Rapid Financing Instrument (RFI) funding will help Sri Lanka manage these urgent pressures while supporting relief and reconstruction efforts. Deputy Managing Director and Acting Chair, Kenji Okamura, noted that the government has already responded with relief measures, supported by strong fiscal performance in 2025, and that the Central Bank of Sri Lanka is prepared to provide liquidity support if needed.

Sri Lankan authorities remain committed to their ongoing economic reform program under the Extended Fund Facility (EFF). The Fifth Review of the EFF was delayed due to the cyclone, as more time is needed to assess its economic impact and determine how IMF support can best assist recovery and reconstruction. An IMF mission will visit Sri Lanka in early 2026 to resume these discussions.

Okamura emphasized that all emergency spending will comply with transparency and accountability standards, and the Central Bank of Sri Lanka will avoid financing the budget. Despite the cyclone, Sri Lanka’s economy has shown signs of recovery from a deep crisis, with progress in price stability, fiscal consolidation, and rebuilding foreign exchange reserves, though GDP has not yet returned to pre-crisis levels.

“The IMF stands with the people of Sri Lanka during this difficult time and will continue to support recovery and reconstruction efforts,” Okamura said.