‘Strong expectation’ of commercial creditor deal: IMF

The International Monetary Fund said there is a “strong expectation” that Sri Lanka will reach a deal with its commercial creditors by completing 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 program 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 financial system’s stability.

She added that public finances have strengthened following substantial fiscal reforms, and this reform momentum must be continued.