Washington, Mar. 21, (dpa/GNA) – The International Monetary Fund (IMF) on Monday approved some $3 billion to support crisis-stricken Sri Lanka’s policies and reforms.
“Sri Lanka has been hit hard by a catastrophic economic and humanitarian crisis,” the IMF said in a statement.
“The economy is facing significant challenges stemming from pre-existing vulnerabilities and policy missteps in the lead up to the crisis, further aggravated by a series of external shocks.”
The 48-month arrangement under the Extended Fund Facility is intended to support the island state’s economy and development and help to stabilize public finances again. The decision by the IMF executive board will “enable an immediate disbursement” of a first payment of around $333 million.
Further payments are contingent on Sri Lankan authorities following previously agreed measures.
Sri Lanka turned to the IMF after the country ran into an unprecedented economic crisis resulting in shortages of fuel, gas, medicine and food, leading to social unrest and protests across the country.
Former president Gotabaya Rajapaska and former prime minister Mahinda Rajapaksa stepped down from their positions following the protests.
State Minister of Finance Shehan Semasinghe said Sri Lanka would tighten financial controls and enact new anti-corruption laws, as he emphasized that the IMF program will help the country’s credibility and capacity to obtain loans from other institutions.
Sri Lanka is experiencing its worst economic crisis in decades.
Lacking foreign currency reserves, the country of about 22 million people cannot repay government debts.
GNA