There is “strong expectation” of Sri Lanka commercial creditor deal: IMF

The International Monetary Fund said on Thursday that there is “strong expectation” that Sri Lanka will reach a deal with its commercial creditors by the completion of the IMF’s second review.

Sri Lanka is in talks with bondholders to restructure about USD 12 billion in debt, a key step in its bid to emerge from a punishing financial crisis.

“There is a strong expectation that agreements with commercial creditors consistent with program parameters will be reached by completion of the second review,” IMF spokesperson Julie Kozack told a press briefing.

The IMF reached a staff-level agreement with Sri Lanka on its second review of a four-year bailout programme late last month, but it still needs approval from the IMF’s board.

Kozack further commented that the macroeconomic policy reforms in Sri Lanka are starting to bear fruit, adding that commendable outcomes include rapid disinflation, robust reserve accumulation, and initial signs of economic growth while preserving the stability of the financial system.

Public finances have strengthened following substantial fiscal reforms, and it is critical that this reform momentum be continued, she added.

(With inputs from Reuters)