Sri Lanka asks International Monetary Fund for rapid financial assistance

Sri Lanka has requested the International Monetary Fund (IMF) for rapid financial assistance and the global lender could consider it after initial reluctance, an aide to the country’s finance minister said on Tuesday.

Protests have erupted in the island nation as it struggles to recover from the consequences of COVID-19, mishandled government finances, and rising fuel prices, which have depleted foreign reserves.

A delegation headed by Sri Lanka’s Finance Minister Ali Sabry kicked off formal talks with the IMF in Washington on Monday for a programme the government hopes will help top up its reserves and attract bridge financing to pay for essential imports of fuel, food and medicines.

“The (foreign minister) made a request for a Rapid Financing Instrument (RFI) to mitigate the current supply chain issues, yet initially IMF of the view that it doesn’t meet their criteria,” Sabry’s aide Shamir Zavahir said on Twitter.

“However, India subsequently made representations on an RFI for (Sri Lanka) as well and IMF may consider this request due to the unique circumstances.”

Sri Lanka is seeking $3 billion from a number of sources in the coming months, including the IMF, the World Bank, and India, according to Sabry, spoke to Reuters earlier this month.

The country’s central bank announced last week that repayment on part of its foreign debt will be suspended awaiting a reorganization.

Protests seeking President Gotabaya Rajapaksa’s removal have continued on for more than a week in Colombo, the commercial hub.