The International Monetary Fund (IMF) on Saturday, 23 April 2022, confirmed that it had held technical discussions with Sri Lanka over the country’s application for a loan. Meanwhile, the World Bank claimed to have prepared an emergency aid package to overcome the crisis in Sri Lanka.
Sri Lanka is a country of 22 million people, which is currently struggling to pay for imports in the midst of the debt crisis and falling foreign exchange reserves causing inflation to soar. The economic crisis in Sri Lanka has resulted in prolonged power outages and fuel shortages.
The economic crisis has also left Sri Lanka short of food and medicine. This condition has provoked a wave of demonstrations in almost every region of Sri Lanka.
Sri Lankan Finance Minister Ali Sabry this week traveled to Washington for talks with the IMF, World Bank, India and other funding agencies to ask for help funding his country. Sri Lanka has now temporarily stopped paying its foreign debt, which amounted to USD 51 billion.
The emergency package offered by the World Bank is USD 10 million which will be disbursed to buy essential medicines. A World Bank spokesman said the money was originally for preparedness for the Covid-19 pandemic, but the allocation was shifted to Sri Lanka.
The World Bank and the IMF have held a meeting this week. However, they do not want to divulge the total loan package disbursed to Sri Lanka. Earlier on Friday, 22 April 2022, Finance Minister Sabry said around USD 500 million in aid was being considered for disbursement to Sri Lanka.
A World Bank spokesman said the loan package would take advantage of bank financing projects and reallocation of funds to quickly provide medicine, food for children and cash for Sri Lanka’s poor and vulnerable household groups.
The IMF in a statement Saturday, April 23, 2022, said it was in talks with its staff to focus on what Sri Lanka needed. This is done by implementing a credible and coherent strategy that can restore Sri Lanka’s macro-economy, strengthen the country’s social safety net, and protect the poor and vulnerable in Sri Lanka during this economic crisis.
