IMF demands stability in Sri Lanka and that talks about a bailout deal are resumed

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COLOMBO: IMFFriday’s statement stated that the government is deeply concerned by Sri Lanka’s crisis and hopes for a resolution. The government also stated that the country will resume negotiations on a bailout package.
Sri Lanka is currently in a political and economic crisis that is getting worse. President Gotabaya RajapaksaMahinda Yopa Abeywardenaon, parliament speaker, announced his resignation on Friday. This comes after a week filled with dramatic developments and mass protests against the government over its mishandling of the country’s economy, which has caused it to collapse.
“We hope for a resolution of the current situation that would allow for our resumption of a dialogue on an IMF-supported programme,” Gerry Rice, the Director of the Communications Department of the IMF, was quoted as saying by News First Lanka.
“The high-level discussions with the authorities that we would need to begin discussions on a programme, we hope again, that these would be able to resume as soon as possible. So, you know, looking to do all we can in just an extraordinarily difficult situation,” he added,
The public debt of Sri Lanka is deemed unsustainable. He also noted that this is the case for all IMF programmes, not just Sri Lanka’s, and was therefore recommended to the Board.
“And we are not at that stage, but for approval by the Board, a programme would require adequate assurances on debt sustainability. So, that’s what I have on this, you know, a situation that’s of great concern in Sri Lanka,” said Rice.
Sri Lanka is experiencing the worst economic crisis in its history since independence from Britain in 1948. It needs at least USD4 billion to overcome severe currency shortages.
After two years of money printing, the island nation’s inflation reached 50 percent in June. The attempted float failed due to a surrender requirement. This sent the rupee to 360 against the US dollar from 200.
Sri Lanka, home to 22 million people, is currently in the grips of unprecedented economic turmoil. This crisis, which has been the worst in 70 years, leaves millions of people struggling to purchase food, fuel, and other necessities. Many people in large cities like Colombo are forced to queue up for hours to get fuel. They sometimes clash with police or the military.



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