Sri Lanka begins next round of negotiations with creditors in April. According to Reuters

© Reuters. FILE PHOTO: A participant stands near the logo of the IMF at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo

By Uditha Jayasinghe

COLOMBO (Reuters) – Sri Lanka will launch the next round of talks with its creditors in the third week of April, President Ranil Wickremesinghe said on Wednesday, adding that the debt-ridden nation had begun receive money from the International Monetary Fund.

The IMF has issued the first tranche of about $330 million, part of a nearly $3 billion bailout that was approved on Monday, Wickremesinghe told parliament.

“This will create opportunities for low-interest credit, restore confidence among foreign investors and lay the foundation for a strong new economy,” he said.

The IMF bailout is expected to catalyze additional support of $3.75 billion from institutions such as the World Bank, Asian Development Bank and other lenders. It also clears the way for Sri Lanka to restructure a significant portion of its $84 billion total public debt.

(GRAPHIC: Waiting too long for bailout approval

Mr Wickremesinghe said Sri Lankan officials would begin the next round of negotiations with bondholders and bilateral creditors in the third week of April, adding that a fully transparent process would be followed. player.

Sri Lanka also aims to reduce inflation to single digits by mid-2023 and then to 4%-6%, Wickremesinghe said. The country’s national consumer price index rose 53.6% year-on-year in February.

This is the 17th IMF bailout package for Sri Lanka and the third since the country’s decades-long civil war ended in 2009.

Weak economic management coupled with the impact of the COVID-19 pandemic left Sri Lanka with a severe shortage of dollars for essential imports early last year, plunging the island nation into a dire financial crisis. the most in seven decades.

Unlike previous bailouts, which were mainly used to boost foreign exchange reserves, funds from the current program could also be used for government spending, IMF senior official Masahiro Nozaki said. know on Tuesday.

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