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Strong progress on debt restructuring – IMF

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Agreements with external commercial creditors soon :
MOU with official creditor committee, Exim Bank due :

The International Monetary Fund (IMF) yesterday expressed confidence that Sri Lanka will reach agreements with external commercial creditors consistent with programme parameters.

Speaking at the IMF press conference IMF Communication Department Director Julie Kozack said that there has been sufficiently strong progress on the debt restructuring front. “Programme performance is strong with most quantitative and structural conditionality for the second review met or implemented with delay and reforms are still ongoing in some areas,” she said.

“There is a strong expectation that agreements with external commercial creditors consistent with programme parameters will be reached soon. So overall we assess that there has been sufficiently strong progress on the debt restructuring front,” she said. Kozack added that authorities have been holding extensive discussions with external official creditors regarding an MOU with the official creditor committee and the final agreements with the Export Import Bank of China. “Discussions with external bondholders continue with the aim of reaching agreements in principle soon,” the director said.

The IMF and the Sri Lankan authorities reached staff-level agreement on the second review of Sri Lanka’s Extended Fund Facility and the international lending agency concluded 2024 Article IV IMF on economic policies to conclude the second review of the economic reform programme.

Kozack confirmed that on June 12, the IMF Executive Board will meet to discuss Sri Lanka’s second review and the Article IV Consultation.

She said that IMF sees that macroeconomic policy reform in Sri Lanka starting to bear fruit. “Commendable outcomes include rapid disinflation, robust reserve accumulation and initial signs of economic growth, while preserving stability of the financial system,”she said.

The IMF Director said that next steps on debt restructuring are indeed to conclude negotiations with external commercial creditors and to implement agreements in principle with the official creditors.“The domestic debt operations are largely completed. Debt restructuring discussions are continuing,” she said.

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