The International Monetary Fund (IMF) announced on tuesday (12) the successful completion of the first review under the 48-month Extended Fund Facility (EFF) with Sri Lanka.
This milestone grants Sri Lanka access to Special Drawing Rights (SDR) 254 million, equivalent to approximately $337 million, aimed at supporting the nation's economic policies and ongoing reforms.
The immediate disbursement of SDR 254 million brings the total IMF financial support to Sri Lanka to SDR 508 million, approximately $670 million. The overall amount allocated to Sri Lanka's EFF Arrangement stands at SDR 2.286 billion, around $3 billion, as approved on 20 March, 2023.
The EFF program is designed to assist Sri Lanka in restoring macroeconomic stability, ensuring debt sustainability, maintaining financial stability, and implementing growth-oriented structural reforms.
In response to the Executive Board discussion, Kenji Okamura, Deputy Managing Director, acknowledged positive developments. He noted, "Macroeconomic policy reforms are starting to bear fruit, with the economy showing signs of stabilisation, rapid disinflation, fiscal adjustment, and reserves build-up."
While most performance criteria were met, challenges in expenditure arrears and tax revenues were highlighted.
Okamura praised Sri Lanka's Governance Diagnostic Report, emphasising its role in addressing corruption issues.
The official agreements with creditors and the Export-Import Bank of China align with EFF targets, marking progress toward debt sustainability.