Sri Lanka gets $3 bln IMF loan approval

Sri Lanka gets approval for a loan worth $3 billion from the International Monetary Fund (IMF) on Monday, amidst the South Asian country’s worst financial crisis in decades.

The loan, which was being discussed for a year, aims to restore macroeconomic stability and debt sustainability and unlock Sri Lanka’s growth potential, said the IMF in a statement.

“In the 75 years of Sri Lanka’s independence, there has never been a more critical period for our economic future”, said the Sri Lankan President, Ranil Wickermesinghe on Monday.

The loan will be targeting improving Sri Lanka’s access to international capital markets, and showing how attractive of a country it is to talent, investors and tourists, Wickermesinghe added.

IMF is set to expend an additional $333 million and funds to Sri Lanka in the upcoming months.

However, IMF’s Extended Fund Facility (EFF) will be providing Sri Lanka with the loan, which is set to provide financial assistance to struggling countries.

“For Sri Lanka to overcome the crisis, swift and timely implementation of the EFF-supported programme with strong ownership for the reforms is critical,” said Kristalina Georgieva, the IMF managing director.

Sri Lanka has been facing economic turmoil for the past year, as a result of food, fuel and medicine shortages when its foreign exchange reserves hit a record low.

Millions of Sri Lankans were unable to find food, fuel for their vehicles or basic medicine.

Sri Lanka’s former president had fled the country following angry protestors storming his residence and office demanding his resignation.