CB Governor upbeat about taking country’s loan request to IMF Board in Jan ’23 if it misses December chance

By Hiran H. Senewiratne

Central Bank Governor Dr. Nandalal Weerasinghe says Sri Lanka is expecting to go to the IMF Board in January 2023 if it misses the December window and is also confident of getting assurance from bilateral creditors soon.

“Most probably meeting the IMF target is too optimistic and satisfactory so far but if we miss that we still have time till January,” Governor Dr. Weerasinghe told the Bank’s monthly monetary policy review meeting yesterday.

The need of the hour was for Sri Lanka to secure assurances from its bilateral creditors in the next couple of weeks, he said. “We are very confident about it considering the manner in which the discussions are progressing,” the Governor said.

It was quite encouraging that bilateral creditors including Paris Club, India, and China formed themselves into an ad-hoc creditor platform and give financial assurances before December 2022, Dr. Weerasinghe said.

Amidst those developments, Sri Lanka also had to complete a series of prior actions to get IMF Board level approval, which was ofutmost importance at this juncture, he said.

“Sri Lanka has already raised taxes and energy prices, and presented a budget for 2023,” the Governor said.

“Although reports claim that the IMF board will go on vacation in December and they will continue their work for at least three days a week as they have a lot on their agenda,” he said.

Sri Lanka has gone to the IMF 16 times due to its soft-peg but managed to avoid default as the country did not have market access to borrow large volumes of foreign debt, he added.Further, the Central Bank money printing had decreased from Rs 341 billion in 2021 to Rs 47 billion between January and October this year, which was a drastic decline, the Governor added.