Third IMF tranche by June provided debt restructuring is concluded

Sri Lanka anticipates the third tranche of the International Monetary Fund (IMF) extended fund facility by June, according to State Minister of Finance Shehan Semasinghe. However, the country must first obtain consensus from the country’s creditors on restructuring its debt.

“We anticipate the third tranche by June. That’s the standard procedure. After a review, there’s staff level agreement between IMF officials and government officials. Following that, a date is decided for the IMF to present that agreement. It is after this that we get the third installment of 337 million dollars.

“But there’s one task we have to complete before that. That is to get the consensus for restructuring debt from our creditors. We have obtained the preliminary consent of all bilateral creditors,” said Semasinghe.

An IMF official said in Washington on Friday April 05 that there are strong expectations of agreements being reached with commercial creditors.

“[T]here is a strong expectation that agreements with commercial creditors consistent with program parameters will be reached by completion of the second review,” she told reporters in Washington.

Domestic debt restructuring is largely completed, she said.

Domestic state enterprise debt re-structuring is expected to completed soon, Deputy Central Bank Governor Yvette Fernando told a business forum earlier this week.

Sri Lanka is in talks with both International Sovereign Bond Holders and other creditors like China Development Bank to conclude a deal. Finalized bilateral restructuring agreements and a deal with private creditors are required to complete the second review of the IMF program.Sri Lanka is hoping to conclude the review by June-July before elections are held, President Ranil Wickremesighe has said. (Economy Next)