The International Monetary Fund (IMF) said on Tuesday it had delayed discussions on Sri Lanka’s next loan tranche due to the country’s political crisis.
The IMF has disbursed over $1 billion out of a $1.5 billion three-year extended fund facility (EFF) loan it agreed in 2016. The aim was to avert a financial crisis and support the economic reform agenda of the government then in power.
Since the removal of Wickremesinghe, Sirisena has dissolved the parliament and called for a fresh election, but the Supreme Court last week ordered a suspension of that decree until it had heard petitions challenging the move as unconstitutional.
In September, the IMF said its mission had made significant progress towards “reaching a staff-level agreement with the government on completing the fifth review of the EFF and discussions will continue during the annual meetings of the IMF and World Bank in October”.
On Tuesday an IMF spokesman told Reuters via email: “We are monitoring the situation and remain in close contact with our technical counterparts in Sri Lanka.”
“Program discussions on the 5th review of the IMF’s Extended Fund Facility are currently on hold, pending clarity on the political situation.”
After completion of the fifth review Sri Lanka would expect to receive a sixth tranche of about $250 million. The total loan was expected to have been disbursed with a seventh tranche by mid 2019.
(REUTERS)
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