WASHINGTON, April 23 (Lifeofrubin) – On Saturday, IMF, the International Monetary Fund, stated it held “Fruitful technical discussion” with Sri Lanka to deal the loan request while the World Bank said it was a preparation of emergency aid package for the country that faces crisis.
Sri Lanka is an island country with 22 million people. It is struggling to pay for imports within a crushing debt crisis and significant drop in foreign exchange funds that has powered rising inflation. Elongated the fuel power cuts and shortages, food and medicines have flashed across the nationwide complaints.
Ali Sabry, Sri Lankan Finance Minister, has visited Washington to meet IMF, World Bank and India as well as other countries this week to discuss finance aid for his country. The debt then extends to $51 billion.
In relation to the loan request by Sri Lanka, A World Bank’s spokesperson said that the World Bank comes with emergency response package that include $10 million which is made to be available for the medicine purchase, Covid-19 funds for health preparedness project.
IMF along with the global lender organized spring meets this week did not offer a total value for the loan package. However, according to Sabry, they will consider approving the loan request about $500 million. According to the World Bank spokesperson, this package would influence the existing bank-financed projects and repurpose the funds to provide the medicines quickly as well as meals for school kids and cash transfers for the poor and susceptible households.
The discussion also covers the support for cooking gas, seeds and fertilizers, basic food supplies and other essentials. The spokesperson said, this is a “deeply concerned” added by the World Bank to help overcome Sri Lanka crisis.
In a statement on Saturday, the discussion among IMF staffs focused on Sri Lanka’s necessity to apply “a credible and coherent strategy” in order to restore the macroeconomic stability. Besides, the discussion is also aimed to strengthen the social safety net and provide protection for the poor and susceptible during the recent crisis.
Masahiro Nozaki, IMF Sri Lanka Mission chief, said, “The IMF team welcomes the authorities’ plan to engage in a collaborative dialog with their creditors.” This way, the teams took step forward to explore a restructuring of $12 billion in sovereign bonds.
Sabry told the reporters on the day before that the discussion held by IMF is focused on a more traditional Extended Fund Facility program. However, $3 to $ billion is needed as a bridge financing.
According to IMF, Sri Lanka’s debt should be on the right way before it requests new loans to Colombo. This process needs a negotiations with China and the other creditor countries. In addition to the IMF loan and World Bank assistance, Sabry said that Sri Lanka is taking with India about some $1.5 billion as a bridge finance to help going on essential imports. He added, he also meets China, Japan and the Asian Development Bank for aid.