IMF agreement on EFF offers relief; strict reforms now essential

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Apr 12, 2026
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By Bandula Sirimanna

The IMF mission has officially reached a staff-level agreement this week for the combined 5th and 6th reviews of the Extended Fund Facility (EFF), signalling a powerful vote of confidence in the nation’s fiscal discipline.

Despite the dual shocks of the devastating Cyclone Ditwah and the West Asian conflict, this agreement paves the way for a crucial US$700 million cash injection into the extended fund facility.

However, the path to unlocking these two tranches hinges on a “make-or-break” requirement: the government must strictly enforce full cost-recovery pricing for electricity and fuel, ensuring that global energy spikes do not derail the country’s hard-won stability, the IMF mission team led by Evan Papageorgiou told a media conference in Colombo on Thursday.

Read more in today's Sunday Times edition here