The International Monetary Fund(IMF) is still assessing whether the agreed terms of the debt restructuring with the bondholders are consistent with the programme parameters, an official said.

At the press briefing held last Friday (12), IMF Director of the Communications Julie Kozack said that the IMF is in the process of assessing whether the agreed terms of the debt restructuring are consistent with the programme parameters. “Once that assessment is complete, we'll be able to communicate our views on that,” she said.

Moreover, she said that sustaining the reform momentum achieved through the programme in Sri Lanka, remains critical because there are important vulnerabilities and uncertainties that still exist.  

Earlier this month, Sri Lanka agreed to a deal for Macro Linked Bonds (MLB) with the Ad Hoc Group of bondholders where it proposed a 28% haircut on the principal of the existing bonds of $ 12.5 billion while a haircut of 11% is proposed on the past due interest which is about $ 1.9 billion, where the haircuts depended on Sri Lanka’s average nominal GDP performance by 2027.

Further, speaking on the salary issue, Kozack said that it's very important to recognize how difficult the situation in Sri Lanka has been over the past few years and that the country does continue to face some very complex policy tradeoffs, “this is particularly the case when it comes to debt and the fiscal position.” she added.

However, she noted that the Government needs to have the resources to pay its bills which means ensuring that taxes are paid by those who can most afford to pay them, and that is a key priority in Sri Lanka.

“ Efforts in this direction include improving tax administration and limiting the size of tax exemptions that have been granted in the past,” she said.