Central Bank Governor Dr. Nandalal Weerasinghe says Sri Lanka should pursue revisions to the targets set under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) arrangement, in light of recent unforeseen developments.
Speaking during a televised programme Weerasinghe said discussions on revising the targets are expected during the upcoming visit of an IMF delegation later this month.
“It was initially expected to complete the fifth review on December 15. However, due to the cyclone, the government noted that the previously proposed budget would no longer be applicable for the coming year, as additional expenditures would be required,” he said, explaining that time was needed to postpone the review, make assessments, and set new targets for the year ahead and beyond.
“The IMF also offers Rapid Financing Instruments (RFI), which are well-suited for situations like this,” he added. “In 2020, we were not eligible for this support due to the lack of debt sustainability. Now that we have achieved it, the RFI is the most appropriate option.” He noted that a key advantage of the RFI is that it does not require a formal agreement with the government.
The team is scheduled to conduct the fifth review of Sri Lanka’s 48-month EFF program.
The governor noted that events such as Cyclone Ditwah, which caused significant damage to infrastructure and livelihoods, have made some targets unfeasible. He added that the national budget, formulated prior to the cyclone, and other evolving factors should be taken into account during the review discussions. (Newswire)