Sri Lanka aims to have $2.9 bln IMF loan finalised in December

(FASTNEWS | COLOMBO) – Sri Lanka expects the International Monetary Fund board to approve a $2.9 billion loan by year-end, officials from the country’s central bank told investors during a virtual presentation on Friday, sources participating in the event said.

Sri Lanka is struggling with its worst economic crisis in more than seven decades, which has led to shortages of essentials and the ouster of a president.

The country expects to renegotiate its debt with private and official creditors after the IMF board approval of the loan, which is expected by mid-December. From now until mid-November, the country looks forward to obtain financing assurances from public- and private-sector creditors.

It aims to reach agreements in principle with all the creditors between the last quarter of the year and the second quarter of 2023, the sources participating in the event said.

The country earlier this month reached a staff-level agreement with the IMF for the loan of about $2.9 billion, contingent on it receiving financing assurances from official creditors and negotiations with private creditors.

The virtual presentation to investors on Friday marks the first time the Sri Lankan government has formally engaged with private bondholders after deciding earlier this year that it would restructure $13 billion in international sovereign bonds, held by private creditors such as asset managers BlackRock and Ashmore.

Central Bank Governor Nandalal Weerasinghe and the Treasury Secretary Mahinda Siriwardena participated in the virtual presentation, along with representatives of financial and legal advisers Lazard and Clifford Chance.