IMF puts on hold final disbursement of $1.5 bn bailout facility
View(s):Sri Lanka’s ailing economy amidst COVID-19 could further worsen as the International Monetary Fund (IMF) has put on hold the final disbursement of the US$1.5 billion Extended Fund Facility.
“The country could not avail of the last disbursement under the EFF, amounting to SDR118.550 million (around Rs.200 million) due to incompletion of the final review of EFF arrangement which has expired in June 2020”, Masahiro Nozaki, IMF Mission Chief for Sri Lanka told the Business Times.
Responding to an email query, he pointed out that, “disbursements under any Fund arrangement can only be made during the period between the date of its approval (in this case June 2016) by the IMF Board and its expiration date”.
For extended arrangements under the EFF, this period cannot be longer than four years, he added.
The EFF with the IMF was extended up to early June this year following the Easter Sunday terror attack last year and thereafter the new government has deviated from the EFF programme’s revenue-based consolidation strategy.
However Mr. Nozaki noted that they continue to engage with the Sri Lankan authorities and are considering the full set of options for engagement.
On financial support the IMF is assessing all relevant conditions on Sri Lanka’s request for a Rapid Financing Facility (RFI) worth $800 million, taking account of the new government’s policies and efforts to address the daunting economic challenges posed by COVID-19, he added.
(BS)