Despite foreign media sources a few days ago claiming otherwise, the International Monetary Fund (IMF) has neither taken a decision nor is considering providing its Executive Board’s approval for Sri Lanka’s External Fund Facility (EFF) before receiving financial assurance from China, The Daily Morning Business learns.
IMF Asia and Pacific Department Director Krishna Srinivasan, during a training programme conducted for South Asian journalists in New Delhi, India referring to the aforementioned foreign media reports, stated that he too came across those reports and said that it is not an official statement put out by the IMF.
Srinivasan stated that the ideal way would be to wait for financial assurance from China. He added, however, that “it is too early to speculate” whether the Fund would consider moving to the next step of providing Executive Board approval before receiving the required assurance.
A few weeks ago, China’s Export and Import Bank (EXIM) provided a two-year moratorium for Sri Lanka, which is insufficient for the IMF to proceed with EFF to Sri Lanka. However, India provided its assurance in January which was followed by the IMF’s confirmation of receipt.
Although local and international economists and Opposition politicians repeatedly pressured the Sri Lankan Government to reach out to the IMF before defaulting on its debts, the Government waited until the economy was in crisis before seeking IMF assistance.