IMF says it had ‘fruitful’ technical talks with Sri Lanka over loan request

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The International Monetary Fund said on Saturday that its staff had held “fruitful technical discussions” with Sri Lankan authorities over the crisis-ridden country’s request for an IMF-backed loan program this week.

The Fund said in a statement that the discussions included the need for Sri Lanka to implement “a credible and coherent strategy” to restore macroeconomic stability and strengthen its social safety net and protect the poor and vulnerable during the current crisis. .

“The IMF team welcomed the authorities’ plan to engage in a collaborative dialogue with their creditors,” IMF mission chief in Sri Lanka Masahiro Nozaki said in a statement.

Protesters holding placards take part in a demonstration against Sri Lankan President Gotabaya Rajapaksa, near the presidential secretariat in Colombo (REUTERS)

Here are some of the main developments:

🔴 Prez Rajapaksa seeks global investment, funding for economic recovery

Sri Lankan President Gotabaya Rajapaksa said on Saturday that the crisis-hit country welcomes investment, technology transfer and financing for its sustainable development efforts and debt restructuring cooperation to support recovery. economy at this critical time.

Gotabaya, addressing the 4th Asia-Pacific Water Summit in Kumamoto, Japan via video link, said that despite considerable resource constraints, compounded by the pandemic and the current financial crisis, the island nation’s commitment towards developing and maintaining a progressive environmental agenda remains unchanged, the Daily Mirror newspaper reported.

“Sri Lanka welcomes investment, technology transfer and funding for our sustainable development efforts, as well as broader development assistance and debt restructuring cooperation to support our economic recovery in this time. critical,” the beleaguered president said.

🔴 Defiant PM says he won’t quit; will also lead any caretaker government

A defiant Sri Lankan Prime Minister Mahinda Rajapaksa on Saturday rejected calls for the formation of an interim government to deal with the unprecedented economic crisis in the indebted island nation, saying he would lead such a waiver anyway if that was necessary.

Speaking to ‘Neth FM’ radio station, the Prime Minister said: “What good are caretaker governments when people with different policies can’t agree? There must be agreement, which is not possible. If it is necessary to have an interim government, it should only be done under my leadership. Anti-government protesters in Sri Lanka are demanding the resignation of President Gotabaya Rajapaksa and his older brother, Prime Minister Mahinda, as they blame government policies for the worst currency crisis.

Prime Minister Rajapaksa said he was not personally aware of any calls for his resignation. “Even if there are demands for my resignation, it would not be from the majority, it would be from a minority group that would not know the political history of the country,” he said.

A protester holding a placard takes part in a demonstration against Sri Lankan President Gotabaya Rajapaksa, near the presidential secretariat in Colombo (REUTERS)

🔴 India extends additional $500m fuel line of credit

India has agreed to extend an additional $500m line of credit to help Sri Lanka import fuel, Finance Minister Ali Sabry has said, amid delays in drawing up a bailout plan with the IMF to alleviate the severe financial crisis facing the island nation.

Sri Lanka is struggling to pay for its imports after its foreign exchange reserves have fallen sharply in recent times, causing a devaluation of its currency and runaway inflation.

“India has agreed to provide an additional $500 million for our fuel imports,” Sabry said on Friday, while adding that he hoped New Delhi would consider handing out another $1 billion as a line of credit. India has already agreed to defer $1.5 billion in import payments Sri Lanka has to make to the Asian Clearing Union. On Friday, New Delhi also extended the term of a $400 million swap granted in January this year, the Indian High Commission said.

A view of tents in a protest area, dubbed Gota-Go village, as people rally against Sri Lankan President Gotabaya Rajapaksa near the presidential secretariat in Colombo (REUTERS)

🔴 India and the IMF consider aid of 2 billion dollars

As Sri Lanka continues to face the worst economic crisis in its history, several neighboring countries, including India and China, have said they will lend their support to the island nation to help it continue its imports essential. The World Bank and the International Monetary Fund (IMF) are also ready to provide relief programs to overcome the crisis.

Sri Lankan Finance Minister Ali Sabry announced on Saturday that India and the World Bank are considering providing around $2 billion in bridge financing to the island nation, which is struggling to pay for the import of essential items including medicine and fuel. In a bid to secure funds, Sri Lanka approached several creditors to restructure its debt and also approached China and Japan for assistance, Reuters reported.

🔴 The World Bank will extend $300-600 million over the next 4 months

Meanwhile, the World Bank is providing $300 million to $600 million over the next four months so the country can get medicines and other essentials, Sabry said. Sabry, who is still negotiating a bailout with the IMF, said while talks with the international lender could take some time, the World Bank has agreed to provide support in the meantime, PA reported.

Demonstrators take part in a protest demanding justice for KD Chaminda Lakshan, who died after being caught in a clash while on his way to Rambukkana gas station to refuel his motorbike, Colombo (REUTERS)

🔴 China has agreed to support Sri Lanka: PM

On Friday, Sri Lankan Prime Minister Mahinda Rajapaksa said China had agreed to support his government after a “very productive” conversation with his Chinese counterpart Li Keqiang, PTI reported. “Had a very productive conversation with Chinese Premier Li Keqiang. I reiterated #SriLanka’s gratitude to #China for its long-standing friendship and for ensuring its support in meeting some of the critical needs affecting the means livelihoods and well-being of people in these trying times,” Rajapaksa tweeted.

On the brink of total bankruptcy, Sri Lanka must pay nearly $7 billion of its total external debt of $25 billion this year. Due to the severe shortage of foreign currency, the country has been unable to purchase imported goods.

As Sri Lanka sinks deeper into the crisis, the country’s otherwise thriving tourism industry has also been hit. As tourism reached its highest level in two years in March, with 100,000 arrivals, restaurateurs and hoteliers fear that the current economic crisis will prevent a stronger recovery in the near future, according to a Reuters report.

Protesters shout slogans against Sri Lankan President Gotabaya Rajapaksa, near the presidential secretariat in Colombo (REUTERS)

🔴 PM says he made a mistake by not attending meeting on Rambukkana violence

Thousands of ordinary Sri Lankans have taken to the streets to protest against power cuts and essential food shortages. One such protest in Rambukkana left one dead and 13 injured earlier this week after police opened fire to quell the protests. Embattled Prime Minister Mahinda Rajapaksa admitted on Friday he made a mistake by not attending a meeting of the National Security Council over the incident.

“I was invited. But I did not attend. It was my fault. But I was briefed on the progress that evening,” the prime minister told parliament. transferred three senior officers for their alleged misconduct to Rambukkana, PTI reported.

Many have also chosen to flee the country. In fact, another 18 Sri Lankan nationals who fled the beleaguered island republic arrived in India on Friday, with the unfortunate families who landed in Dhanushkodi in the early morning being accommodated at Mandapam refugee camp.

(With agency contributions)

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