IMF Managing Director Kristalina Georgieva highlighted the importance of ongoing support from global financial institutions, official creditors, and bondholders in ensuring the success of Sri Lanka's economic reforms.
She noted that recent agreements between Sri Lanka’s government and both external bondholders and a local creditors’ consortium represent significant progress. The IMF staff has confirmed these agreements align with the objectives of the IMF-supported program.
Georgieva emphasized that implementing these agreements effectively will provide substantial relief in external debt payments and help Sri Lanka achieve its goal of restoring debt sustainability. She stressed the importance of swiftly completing the debt restructuring process with broad participation from creditors to maintain the program's momentum.
The IMF chief also acknowledged Sri Lanka’s continued efforts to finalize remaining debt agreements, underlining that a united approach is essential for the success of the restructuring process.
She praised the Sri Lankan authorities’ determination to advance their reform agenda, aiming to achieve long-term economic stability and growth.
Georgieva reaffirmed the IMF's commitment to supporting Sri Lanka and its people, expressing readiness to assist the country in meeting its economic and social goals.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), shared this statement with Members of the financial community today (November 27).
“The Sri Lankan authorities have been implementing an ambitious economic reform program supported by the IMF, which aims to restore debt sustainability and external viability, underpin broad macroeconomic reforms, and strengthen economic governance and transparency. Sri Lanka’s economic reform program is supported by an SDR 2.286 billion (about US$3 billion), 48-month Extended Fund Facility arrangement, approved by the IMF’s Executive Board on March 20, 2023. The program has gotten off to a good start with the economy recovering, inflation remaining low, and reserves being accumulated. Following the completion of two reviews, IMF staff reached staff level agreement with the authorities on November 23 for the third review under the arrangement. In June 2024, Sri Lanka agreed on a memorandum of understanding with the Official Creditors Committee (OCC) and reached final agreement with China EXIM Bank that would deliver a debt treatment by those creditors aimed at restoring debt sustainability consistent with IMF program parameters.
“Building on this progress, and following several months of constructive discussions, the agreements reached by the Sri Lankan authorities with both the Steering Committee of the Ad Hoc Group of external bondholders, and the Local Consortium of Sri Lanka, mark a significant step forward. The terms of these agreements have been assessed by the Fund staff as being in line with the parameters of the IMF-supported program. Anchored by policies under the IMF-supported program, the successful implementation of these agreements will provide significant external debt service relief and further contribute to Sri Lanka’s efforts to restore debt sustainability.
“To capitalize on this momentum, rapid completion of the debt operation with high creditor participation would be vital for the success of the program. In parallel, the authorities continue to finalize other remaining debt restructuring agreements. This collective effort is key to supporting the success of Sri Lanka’s debt restructuring efforts.
“The Sri Lankan authorities have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth. The continued support from international financial institutions and other official creditors, together with the participation of bondholders in a debt exchange consistent with debt sustainability, is necessary to underpin the success of these reform efforts.
“The IMF remains a steadfast partner in supporting Sri Lanka and its people and stands ready to assist the country achieve its economic and social reform goals.”
