• Siyambalapitiya accuses creditors caught up in domestic interest of delaying EFF
• Emphasises IMF should not compare SL with others as country is in ‘unique’ situation
• Strongly believes IMF Board nod will come before March 2023

The State Minister of Finance has pinned the blame for the Government’s delay in obtaining International Monetary Fund (IMF) assistance on the domestic interests of bilateral creditors, charging that they have been continuing to hold up the obtaining of IMF Executive Board approval for the $ 2.9 billion Extended Fund Facility (EFF).

Speaking to The Sunday Morning Business, State Minister of Finance Ranjith Siyambalapitiya admitted that the continuing delay in obtaining financial assurances from certain bilateral creditors was one of the reasons for the continuing hold-up in obtaining the IMF fund facility.

He pointed out that these bilateral creditors must balance their own domestic interests and issues and consider the interests of their other debtors when granting debt relief to Sri Lanka.

He further elaborated that Sri Lanka’s present negotiations with the IMF should not be compared to its experiences on previous occasions because Sri Lanka was currently negotiating from a unique situation which it had not previously faced.

“We turned to the IMF for assistance once the crisis had severely aggravated. We may have gone to the IMF 16 times previously. However, in each of those previous instances, we sought IMF assistance at the correct time and did not wait until things reached a critical stage, as we did this time around. 

“We delayed seeking IMF assistance by around two years and approached it only when things reached a critical stage. When an ordinary person approaches a bank when his finances are in a critical stage, obtaining assistance is difficult. Similarly, Sri Lanka is also facing such difficulties in its negotiations with the IMF,” he explained.

However, he further stated that Sri Lanka had achieved certain agreements with the IMF and creditors following several rounds of difficult negotiations, adding that therefore, the Government strongly believed that it would be able to obtain the $ 2.9 billion IMF fund facility before March.

It has been widely reported that the main reason for the delay in obtaining Executive Board approval was the failure by China and India to grant financing assurances.

On Wednesday (18), Indian Ministry of Finance Department of Economic Affairs Additional Secretary Rajat Kumar Mishra via a letter announced that India was committed to supporting Sri Lanka with financing/debt relief consistent with restoring Sri Lanka’s public debt sustainability under an IMF-supported programme and that the financing/debt relief would be provided by the Export-Import Bank of India.