IMF Chief: High Creditor Participation Vital for Lanka Economic Revival
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has reaffirmed that the IMF remains a steadfast partner in supporting Sri Lanka and its people and stands ready to assist the country in achieving its economic and social reform goals.
In a statement to the financial community members, Georgieva said that the Sri Lankan authorities have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth.
She also stressed that the continued support from international financial institutions and other official creditors, together with the participation of bondholders in a debt exchange consistent with debt sustainability, is necessary to underpin the success of these reform efforts.
“The Sri Lankan authorities have been implementing an ambitious economic reform program supported by the IMF, which aims to restore debt sustainability and external viability, underpin broad macroeconomic reforms, and strengthen economic governance and transparency.
“Sri Lanka’s economic reform program is supported by an SDR 2.286 billion (about US$3 billion), 48-month Extended Fund Facility arrangement, approved by the IMF’s Executive Board on March 20, 2023. The program has gotten off to a good start, with the economy recovering, inflation remaining low, and reserves accumulating.
“After completing two reviews, IMF staff reached a staff-level agreement with the authorities on November 23 for the third review under the arrangement. In June 2024, Sri Lanka agreed on a memorandum of understanding with the Official Creditors Committee (OCC) and reached a final agreement with China EXIM Bank that would deliver a debt treatment by those creditors aimed at restoring debt sustainability consistent with IMF program parameters,” elaborated the IMF Chief in her statement.
“Building on this progress, and following several months of constructive discussions, the agreements reached by the Sri Lankan authorities with both the Steering Committee of the Ad Hoc Group of external bondholders and the Local Consortium of Sri Lanka mark a significant step forward.
“The Fund staff has assessed the terms of these agreements as being in line with the parameters of the IMF-supported program. Anchored by policies under the IMF-supported program, the successful implementation of these agreements will provide significant external debt service relief and further contribute to Sri Lanka’s efforts to restore debt sustainability,” noted Kristalina Geogieva.
According to the Managing Director of the IMF, to capitalize on this momentum, rapid completion of the debt operation with high creditor participation would be vital for the program’s success.
She also noted that the authorities continue to finalize other remaining debt restructuring agreements in parallel. This collective effort is crucial in supporting the success of Sri Lanka’s debt restructuring efforts.
Full Statement Below: Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), issued the following statement about Sri Lanka to Members of the Financial Community today:
“The Sri Lankan authorities have been implementing an ambitious economic reform program supported by the IMF, which aims to restore debt sustainability and external viability, underpin broad macroeconomic reforms, and strengthen economic governance and transparency. Sri Lanka’s economic reform program is supported by an SDR 2.286 billion (about US$3 billion), 48-month Extended Fund Facility arrangement, approved by the IMF’s Executive Board on March 20, 2023. The program has gotten off to a good start, with the economy recovering, inflation remaining low, and reserves accumulating.
“After completing two reviews, IMF staff reached a staff-level agreement with the authorities on November 23 for the third review under the arrangement. In June 2024, Sri Lanka agreed on a memorandum of understanding with the Official Creditors Committee (OCC) and reached a final agreement with China EXIM Bank to deliver a debt treatment by those creditors to restore debt sustainability consistent with IMF program parameters.
“Building on this progress, and following several months of constructive discussions, the agreements reached by the Sri Lankan authorities with both the Steering Committee of the Ad Hoc Group of external bondholders and the Local Consortium of Sri Lanka mark a significant step forward.
The Fund staff has assessed the terms of these agreements as being in line with the parameters of the IMF-supported program. Anchored by policies under the IMF-supported program, the successful implementation of these agreements will provide significant external debt service relief and further contribute to Sri Lanka’s efforts to restore debt sustainability.
“To capitalize on this momentum, rapid completion of the debt operation with high creditor participation would be vital for the program’s success. In parallel, the authorities continue to finalize other remaining debt restructuring agreements. This collective effort is crucial in supporting the success of Sri Lanka’s debt restructuring efforts.
“The Sri Lankan authorities have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth. The continued support from international financial institutions and other official creditors, together with the participation of bondholders in a debt exchange consistent with debt sustainability, is necessary to underpin the success of these reform efforts.
“The IMF remains a steadfast partner in supporting Sri Lanka and its people and stands ready to assist the country in achieving its economic and social reform goals.”